During the cooling off period, underwriters would be allowed to do all of the aforementioned except: b) advertise the issue.
<h3>Who is an
underwriter?</h3>
An underwriter can be defined as an individual or business firm that is saddled with the responsibility of evaluating and assuming another party's financial risk for an agreed amount of money (fee), which is often paid as a spread, commission, interest, or premium.
This ultimately implies that, an underwriter helps a lender (financial institution) in determining the level of risk associated with an issue.
As a general rule, underwriters would be allowed to do all of the following during the cooling off period:
- Take indications of interest.
- Distribute a preliminary prospectus.
In this context, we can reasonably infer and logically deduce that during the cooling off period, underwriters would only be allowed to do all of the aforementioned except distribute sale or advertise the issue.
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Answer:
Return on equity.
Explanation:
Financial statements can be defined as a document used for the formal communication or disclosure of financial information and statements to present and potential users such as investors and creditors. These includes balance sheet, statement of retained earnings and income statement.
The financial ratio that measures the accounting profit per dollar of book equity is referred to as the return on equity. It is calculated by dividing the net income with the shareholder's equity at a specific period of time
Answer: <em>(C.) $2,005</em>
Explanation:
Given :
Money Co. made a cash outflow of $194,000 for the $200,000 loan Money gave to Home Co.
The book value of the loan is $194,000.
The stated rate is 11%.
Hence they will receive an effective interest rate of 12.4% on cash outflow.
∴
Income from the loan = Book value × Effective interest rate × No. of months of the year
= $194,000 × 0.124 × 
= $2,004.67
Answer:
The statement that is false about mortgage loans is Advertised rates are annual percentage rates.
Explanation:
Mortgage loan refers to a loan that uses real estate as collateral to receive cash upfront to be redeemed after the loan repayment is completed. if the loan is not remitted as at when due , the lender lays claim to the real estate property.
By increasing the number of payments per year you increase your effective borrowing rate.
When you use a spreadsheet to calculate your interest rates, it uses the periodic interest rate, not the annual percentage rate.
You can find a monthly payment by dividing the annual payment by 12.
However, advertised interest rate are not the same as your loan's annual percentage rate (APR) because other charges like mortgage insurance, closing costs, discount points and loan origination fees apply.
