Statistics and Econometrics Mid-Term – Bank Loan Default I. Introduction The question requires us to understand what factors could lead to people defaulting on their loans. The variables that will be discussed include age, education, employment, address, income etc. An overview of the data will be provided along with assessing inter-relationships among variables as well as providing a good fit model. II. Overview of Data The sample includes 700 observations in the data set based on
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time. A loan can be renewed and extended either at the desk or over the telephone. If a book is not available because it already out on loan a member can reserve a copy. If it is not in the collection, the librarian can acquire a copy for the library (if it is within budget) or arrange an inter-library loan. Every year the librarians trawl through the collection and weed out books that are out of date or in poor condition and buy new books. The membership lists, catalogue and loans are still
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considering the following three alternative bank loans for $1,000,000: a) 10 percent loan paid at year end with no compensating balance b) 9 percent loan paid at year end with a 20 percent compensating balance c) 6 percent loan that is discounted with a 20 percent compensating balance requirement Assume that you would normally not carry any bank balance that would meet the 20 percent compensating balance requirement. What is the rate of annual interest on each loan? 4. An important source of temporary cash
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such an important issue. The state was able generally to afford university for almost all the students, however since the demand, in these years, is increasing it is becoming a problem for the state economy which due to this the tax for the students’ loan have increased: this is why some people argue that. I disagree to this extent as I think that every student should be helped by the state to join higher education, and in relation to what they have when they’re joining university, their income, or
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Working capital: Current assets minus current liabilities. Working capital measures how much in liquid asset as company has available to build its business. The number can be positive or negative, depending on how much debt the company is carrying. In general, companies that have a lot of working capital will be more successful since they can expand and improve their operations. Companies with negative working capital may lack the funds necessary for growth. also called net current assets or current
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Financial Market Homework 1 For 09/30/2014 Azizi Nabil , Ferrary Alexandra , Seneclauze Pierre , Renaud Gigou Review Question (5) : 5. List and explain the three financial factors that influence the value of a business. The three factors that affect the value of a firm's stock price are cash flow, timing, and risk. The Importance of Cash Flow: In business, cash is what pays the bills. It is also what the firm receives in exchange for its products and services. Cash is therefore
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I, Jane Doe, borrowed $200 on October 16th, 2012, from John Smith. The money was borrowed in a loan to be repaid in one lump sum. I, Jane Doe, will repay the entire amount of the loan, $200, with a personal check to John Smith, by December 16th, 2012. If for any reason the repayment is late, a $5 per day late charge will ensue until the entire amount of the loan, with additional late fees, is paid. The promisor and the payee agree to the payment agreement terms listed above. Signed: ____________________________________________
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74 | 45 | Ship-Breaking/Ship Building | 3 | 4 | Telecom | 11 | 5 | Weak Sectors | Aggregate Loan Amt (2013) | Aggregate Loan Amt (2014) | Infrastructure | 21912 | 57233 | Iron & Steel | 52682 | 43539 | Power | 18640 | 19138 | Textiles | 17677 | 20138 | Ship-Breaking/Ship Building | 6213 | 16792 | Telecom | 11681 | 10785 | Major Players Company | Loan Amount | Kingfisher Airlines | 2673 | Winsome Diamond | 2660 | Electrotherm India | 2210 | Zoom
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Calculating Interest Rates Based on Expectations Theory Suppose the real risk-free rate (r*) is 2% Investors demand a 0.1% maturity risk premium per each year remaing until maturity We will further assume that DRP = 0 and LP = 0 -Treasury bonds have almost-zero default risk and liquidity risk Finally, yearly inflations are expected to be: 1.0% in Year 1 1.8% in Year 2 2.0% in Year 3 Question: How do we calculate the inflation premium for 1-year bond, 2-year bond, and 3-year bond? Inflation
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Sources of Finance Loan from Family/Friends: Borrow money from another family member or friend, where length of loan, interest rate on loan and any other terms of the loan must be negotiated between parties. Advantages of a loan from family/friends is lower interest rates and more flexible repayment terms. Disadvantages of a loan from family/friends is lack of clarity with amount borrowed (the interest rate and the required payment terms) and also borrowing from friends and family can fracture
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