Question
In: Finance
Property pledged to a lender to guarantee payment in the event the borrower defaults is called...
Property pledged to a lender to guarantee payment in the event the borrower defaults is called _____.
|
lost property |
||
|
liquid assets |
||
|
insolvency |
||
|
collateral |
Solutions
Expert Solution
Solution :
The answer is the fourth option i.e., Collateral.
A collateral is a property or any other asset pledged to guarantee payment in the event the borrower defaults in the payment of the loan taken.
A collateral may be a secured collateral or unsecured collateral.
When the value of the collateral exceeds the value of loan it is known as a secured collateral.
When the value of the collateral does not cover the amount of loan, it is known as an unsecured collateral.
The other options are incorrect because :
Lost Property is a place where articles lost in public are stored and kept for their recognition and retrieval by the owners who had lost them
Liquid assets are those assets that can be converted into cash in the shortest span of time without a significant loss or no loss in the value of the asset being converted.
Insolvency is a state when the liabilities payable by an Individual exceed the assets owned by him. Insolvency is often used as a synonym to Bankruptcy.
jeff jeffy answered 2 years agoRelated Solutions
Insurance that protects the lender in the event that the borrower does not repay the mortgage...
Insurance that protects the lender in the event that the
borrower does not repay the mortgage is called:
Group of answer choices
good faith insurance.
homeowners’ insurance.
mortgage insurance.
settlement insurance.
What are some reasons why a borrower defaults on their loan obligations?
What are some reasons why a borrower defaults on their loan
obligations?
A bank wants to estimate the value of inventories or fixed assets pledged by a borrower...
A bank wants to estimate the value of inventories or fixed
assets pledged by a borrower as collateral in the event of default
on a loan. Discuss why the value of this collateral is affected by
the likely reasons that a borrower might default on its
loan. In particular, compare the value of the collateral
in the event of bankruptcy for a firm where the most likely reason
for bankruptcy is due to risky investments in derivative securities
to a more...
Suppose a borrower with two mortgages defaults. At the time of the default, the first lien...
Suppose a borrower with two mortgages defaults. At the time of
the default, the first lien has a balance of $200,000; the second
lien has a balance of $25,000. The borrower owes $5,000 in property
taxes and $2,000 to a relative that lent the borrower money. The
house sells for $215,000 in a foreclosure auction. How much of a
deficiency will the second lien lender have?
4. Suppose a borrower with two mortgages defaults. At the time of the default, the first...
4.
Suppose a borrower with two mortgages defaults. At the time of
the default, the first lien has a balance of $200,000, the second
lien has a balance of $50,000. The borrower owes $5,000 in property
taxes. The house sells for $150,000 in a foreclosure auction. How
much of a deficiency will the first lien lender have?"
"$50,000 "
"$55,000 "
"$145,000 "
"$150,000 "
5.
"Suppose you save $50,000 today at an annual interest rate of
r=5.60% compounded monthly....
Suppose a borrower with two mortgages defaults. At the time of the default, the first lien...
Suppose a borrower with two mortgages defaults. At the time of
the default, the first lien has a balance of $200,000; the second
lien has a balance of $25,000. The borrower owes $5,000 in property
taxes and $2,000 to a relative that lent the borrower money. The
house sells for $215,000 in a foreclosure auction. How much of a
deficiency will the second lien lender have?
$10,000
$15,000
$17,000
$8,000
When the owner defaults on a mortgage, what can the lender do to obtain the money...
When the owner defaults on a mortgage, what can the lender do to
obtain the money that is owed?
Explain the advantage and disadvantages of credit to the borrower, the lender and the entire economy...
Explain the advantage and disadvantages of credit to
the borrower, the lender and the entire economy of a country
Suppose that a borrower and a lender agree on the nominal interest rate to be paid...
Suppose that a borrower and a lender agree on the nominal
interest rate to be paid on a loan. Then inflation turns out to be
lower than they both expected.
Is the real interest rate on this loan higher or lower than
expected?
Use your own “made-up” figures for nominal interest rate,
expected inflation rate and actual inflation rate to explain your
answer in part “a”?
Does the lender gain or lose from this unexpectedly low
inflation? Does the borrower...
The lender and borrower expect inflation rates of 5% in 2019,4.5% in 2020, and 3%...
The lender and borrower expect inflation rates of 5% in 2019,
4.5% in 2020, and 3% in 2021. What is the geometric average of the
expected inflation rates? If the lender requires a real rate of
interest of 5%, what nominal rate would (s)he set for a 3 year loan
(assume the loan is structured such that principle and interest are
due in one lump sum at loan maturity)?
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