1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
taurus [48]
3 years ago
9

Why might a bank offer to make a loan to a customer at a low initial rate that will increase after a set period of time?

Business
2 answers:
erica [24]3 years ago
3 0
To make the loan look more attractive and competitive now
marysya [2.9K]3 years ago
3 0

Why might a bank offer to make a loan to a customer at a low initial rate that will increase after a set period of time?

To make the loan look more attractive and competitive now.

When you apply for a loan, it's important to look at the terms and conditions. Just because the interest is low at the beginning, if not paid off quicker than the full term, it may go up increasing the amount being paid in interest over principle. When a bank offers a low initial interest rate, it's very attractive for a consumer who really needs to the loan to take it almost forgetting or being blind to the fact it will increase astronomically and basically even out to a set rate that's higher from the beginning.

You might be interested in
As little as _______ percent of privately owned 4es ever move from the start-up stage to the success stage.
Vinil7 [7]
<span>As little as (C) 2 percent of privately owned 4es ever move from the start-up stage to the success stage. Owning a start-up company is a tedious and challenging job. It takes a lot of responsibility towards making it a stable one and easily attack conflicts. It is a big risk, but the success of the risk will bring you to a higher level.</span>
6 0
3 years ago
The interest rate on short-term U.S. government bonds is 4 percent. The risk premium for any asset with a beta = 1.0 is 6 percen
Basile [38]

Answer:

The average expected rate of return on the market portfolio is 10 percent.

Explanation:

The CAPM (fixed asset pricing) model describes the relationship between systematic risk and expected return on assets, especially stocks. CAPM is widely used throughout the financial community to value high-risk securities and achieve the expected returns on assets when taking into account the risk of those assets and the cost of capital.

The formula for calculating the expected return on an asset taking into account its risk is as follows:

ERi = Rf + βi (ERm - Rf)

where:

ERi = expected return on investment

Rf = risk-free interest rate = 4 percent.

βi = beta inversion =1.0

(ERm −Rf) = market risk premium = 6 percent.

ERi = 4 + 1 ×(6) =10

The average expected rate of return on the market portfolio is 10 percent.

6 0
3 years ago
Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio'
agasfer [191]

Answer:

0.68

Explanation:

A portfolio consists of an investment of $7,500

The amount of common stock is 20

The portfolio beta is 0.65

Suppose one of the stock in the portfolio is sold with a beta of 1.0 for $7,500

The proceeds realized is then used to purchase another stock with a beta of 1.50

The first step is the to calculate the change in beta

Change in beta= 1.50-1

= 0.5

The next step is to divide the change in beta by the number of common stock

= 0.5/20

= 0.025

Therefore, the new beta can be calculated as follows

= 0.65+0.025

= 0.68

Hence the new portfolio's beta is 0.68

4 0
3 years ago
write the name of tourism sector related occupation and clarify its importance with reference to nepal​
KiRa [710]

NEPAL TOURISM AND OCCUPATIONS RELATED TO IT

Explanation:

The various tourism sector related occupations include

  • Travel agents
  • Nature park guides
  • Meeting planners
  • Cartographers
  • Tourism professionals
  • Sommelier
  • Tour operator and so on.

<u>IMPORTANCE OF TOURISM WITH REFERENCE TO NEPAL </u>

<u />

  • one among the main importance is the foreign exchange of currency since it has a very higher exchange value compared to other tourism spots.
  • exports to other countries from Nepal are very cheap and several good are produced on a large scale.
  • it offers mountaineering and other type of adventures.
  • cheap way of lifestyle attracts a lot of tourists all over the world.

5 0
3 years ago
What is the effect on total assets and​ stockholders' equity of paying the telephone bill as soon as it is received each​ month?
Archy [21]

Answer:

Option C) Decrease in Total Assets , and No Effect on Equity

Explanation:

Telephone bill it's a Current Liability , if you decide to pay it as soon as you receive it you have to use Cash which is part of your Current Asset, so the impact it's a decreased in your Current Assets through the Cash component.

This movement has no impact in the Sotckholder Equity.

6 0
3 years ago
Other questions:
  • During the current month, a company that uses job order costing incurred a monthly factory payroll of $180,000. Of this amount,
    15·2 answers
  • Susan recently quit working for a local firm and has yet to find a new job. She knows she can maintain her health insurance from
    7·1 answer
  • One end item A requires three component parts: B, C, and D. The bill of material indicates that for each completed A, 3 units of
    5·1 answer
  • Instructions:Type the correct answer in the box. Spell all words correctly.
    9·2 answers
  • Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial
    15·1 answer
  • Match the pairs to their respective categories.
    6·1 answer
  • Tracy transfers property with a value of $60,000 and adjusted basis of $50,000 to form Riley Corp. solely in exchange for all 10
    15·1 answer
  • Cash Now Industries just hired 500 new workers to build ATMs and self-service check-out systems at its manufacturing plant in Te
    5·1 answer
  • The gdp deflator can be used to calculate the inflation rate. True or False
    15·1 answer
  • "An economy is based on three sectorsdashagriculture​, ​manufacturing, and services. For each unit of​ output, agriculture requi
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!