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3 years ago

What is the main difference between ballon mortgage and arm

Business

2 answers:

LenKa [72]3 years ago

4 0

Answer:

A balloon mortgage is a type of a loan that requires the borrower to make the payment as a lump-sum at the maturity period while under the ARM the borrower is allowed to choose the small periodic payments suitable for both the lender and the borrower.

ARM is the abbreviation for Adjustable Rate Mortgage. therefore the loan repayment changes according to agreement between the lender and the borrower.

OverLord2011 [107]3 years ago

3 0

Explanation:

Mortgages is a legal document between the lender and the borrower. Lender can be a bank or a financial institution which takes the borrower's property as a collateral and charge a percentage of interest on the money. A Balloon mortgage is a loan in which the borrower has to pay the lump sum amount to fulfill repayment. Balloon loans are short term duration loans. These are interest only installment payments. ARM Mortgage is the Adjustable Rate mortgage in which the percentage of interest is adjusted periodically on the basis of index

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EB1.

olya-2409 [2.1K]

Answer:

34,000 units

Explanation:

Given that,

Budgeted sales = 32,000 units

Ending inventory required = 6,000 units

Beginning inventory = 4,000 units

Hence,

Number of units = Budgeted sales + Ending inventory - Beginning inventory

Number of units = 32,000 units + 6,000 units - 4,000 units

Number of units = 34,000 units

Therefore, 34,000 units must be produced to also meet the 6,000 units required in ending inventory.

3 0

3 years ago

Princess Cruise Company (PCC) purchased a ship from Mitsubishi Heavy Industry. PCC owes Mitsubishi Heavy Industry 500 million ye

Illusion [34]

Answer:

Explanation:

In the case of forwarding hedge:

The future dollar cost will be = FX receiveable ÷ Foward exchange rate

= 500 million yen ÷ 110 yen/dollar

= $4.55 million

For money market hedge:

Present value of yen payable = $500 \ yen \div (1+ \dfrac{5}{100})$

$= \dfrac{500 \ yen }{1.06}$

= 476.20 million yen

PCC would convert dollars to yens at the spot market rate and borrow yen such that it would get 500 million yen at maturity(i.e after one year) for Mitsubishi to receive it.

Dollars needed to get these yen = 476.30 yen ÷ 124 yen/dollar

= $3.84 million

Future Value of these dollars (for comparison with the foward market hedge) = $3.84 × (1 + 0.08)

= $4.15 million

Hence, the money market hedge is better as the dollar cost is lower than the forward market hedge to meet the obligation.

On the maturity date, the spot rate is 110 yen/dollar

Ad the strike price = 0.0081 /dollar

It is better for the company to go for the strike price due to the fact that it has a lower rate than the spot rate.

Now;

The premium amount = 500000000 yen × 0.014 dollar / yen

= 70000 dollars

However; the Future dollar-cost payable = 500000000 yen × 0.0081 dollar /yen

= 4050000 dollars

By applying option hedge, the total dollar cost required to meet the obligation = (4050000 + 70000) dollars

= 4120000 dollars

The dollar cost needed from the option hedge required to matching the forward hedge is determined by subtracting it from the premium amount:

Thus;

for option hedge, dollar cost needed = (4550000 - 70000) dollars

= 4480000 dollars

The required future spot rate = 500000000/4480000

= 111.61 yen/dollar

As a result, at the future spot rate of 111.61 yen/dollar, PCC will be unconcerned about and indifferent about the option or forward hedge because the future dollar cost of meeting the obligation will be the same.

3 0

2 years ago

When Abu went to open a bank account at First National Bank, he was greeted by a friendly account representative, who explained

8090 [49]

Answer:

Interactive

Explanation:

Interactive marketing is the kind or form of marketing which is defined as the one to one practice of marketing that centres the individual person or consumer and then prospects the actions.

In this kind of marketing practice, it comprise of the initiatives of marketing that are triggered through behaviors as well as preferences of the customer. And for this reason, it is major shift from the campaign grounded efforts of marketing.

So, in this case, the actions through the account representative are a kind of interactive marketing.

3 0

3 years ago

Janice really likes potatoes. Potatoes cost $1 per pound, and she has $5.00 that she could possibly spend on potatoes or other i

fiasKO [112]

Answer:

A) Janice will purchase 3 pounds of potatoes since she will buy them until her consumer surplus ≤ 0. The fourth pound of potatoes costs $1, and Janice is willing to pay only $0.30, so her consumer surplus s negative (-$0.70).

Consumer surplus is the difference between the price that a customer is willing and able to pay for a good and the good actual price.

B) If Janice only had $2 to spend, she would buy 2 pounds of potatoes, since her consumer surplus is positive at 2 pounds.

first pound costs $1, and Janice is willing to pay $1.50, consumer surplus = $0.50

second pound costs $1, and Janice is willing to pay $1.14, consumer surplus = $0.14

3 0

3 years ago

Vitale Hair Spray had sales of 27,000 units in March. A 60 percent increase is expected in April. The company will maintain 20 p

romanna [79]

Answer:

50,490 units

Explanation:

The computation of the number of units the company should produced is shown below:

= Expected sales units + ending inventory units - opening inventory units

where,

Opening inventory units is 1,350 units

Expected sales units is

= $27,000 + $27,000 × 60%

= $27,000 + $16,200

= 43,200 units

The ending inventory units is

= $43,200 × 20%

= 8,640 units

So, the units to be produced is

= 43,200 units + 8,640 units - 1,350 units

= 50,490 units

5 0

3 years ago