Find what is the risk class of the customer

Assignment Help Accounting Basics
Reference no: EM132604655

The Bank of Fast Loans uses the following rating scheme to classify the riskiness of its customers.

Risk Class Risk Premium (%)

Prime.05

High grade1.0

Upper medium grade1.5

Lower medium grade2.0

Speculative: Non-investment grade4.0

Speculative: Highly6.0

Substantial risks9.0

Extremely speculative12.0

The bank's pure rate of interest is 2% and the inflation premium is 3.5%.

Question 1: The bank offers an annual rate of 15.07% to a customer. What is the risk class of this customer?

Reference no: EM132604655

Questions Cloud

Determine what was the most recent dividend paid by company : The dividend yield of a stock is 9 percent. If the market price of the stock is $18 per share,What was the most recent dividend paid by the company?
Information Governance-IT Governance-Data Governance : Information Governance, IT Governance, Data Governance: What's the Difference? Briefly explain.
Prepare the cash budget of Louw Traders : The business opening May cash balance is R30 000 Minimum cash balance requirement: Prepare the cash budget of Louw Traders
What will be percent change in market price of bond : Shady Rack Inc. has a bond outstanding with 9 percent coupon, What will be the percent change in the market price of the bond?
Find what is the risk class of the customer : The Bank of Fast Loans uses the rating, The bank offers an annual rate of 15.07% to a customer. What is the risk class of the customer?
Healthcare strategic planning : What is meant by strategic group analysis, and why is this technique especially useful in healthcare strategic planning?
What is the company cost of equity capital for david ortiz : David Ortiz Motors has a target capital structure of 40% debt and 60% equity. The yield to maturity, What is the company's cost of equity capital?
Pair of opposite terms : Discuss the following in regard to your chosen pair of "opposite" terms.
What will be the total labor cost for the month of August : Each handbag requires 1.7 hours of unskilled labor (paid $17 per hour) and 3.1 hours of skilled labor (paid $23 per hour). What will be the total labor cost

Reviews

Write a Review

Accounting Basics Questions & Answers

  What income will frank report from the partnership

Frank did not receive his check until January 1, 2009. What income will Frank report from the partnership on his 2008 personal return

  What is the Net Present Value of the investment

A new mall in the City of Cape Town has just opened. What is the Net Present Value of the investment with a 10% per annum discount rate

  Prepare a partial balance sheet for nike

Prepare a partial balance sheet for Nike for these items, Inc.reported the following plant assets and intangible assets for the year ended

  Cost of goods sold as a percentage of sales is expected

Cost of goods sold as a percentage of sales is expected to increase to 60%. Other than depreciation, all operating costs are variable

  Assume the shareholders equity of the transacting

Indicate by letter whether each of the transactions listed below increases (I), decreases (D), or has no effect (N) on retained earnings.

  Prepare an income statement and retained earnings statement

In June, the company issued no additional stock, but paid dividends of $2,000. Prepare an income statement and Retained Earnings Statement for the month of June

  Post-closing trial balances

Explain in detail a post-closing trial balance, how it relates to the practice of accounting and its uses in business?

  Journalize the share transactions of Fairly Company

On January 1, 2017, Fairly Company issued 30,000 ordinary shares with a $2 par value for $150,000. Journalize the share transactions of Fairly Company

  The confectioners corner inc would like to buy a new

the confectioners corner inc. would like to buy a new machine that automatically dips chocolates. the dipping operation

  What is the computer equipments book value

What is the computer equipments book value on May 31 - Post the purchase of May 1 and the depreciation on May 31 to T-accounts

  Critique use of pro-forma earnings for financial statement

Explain why a high price-to-earnings ratio is crucial to Tyco's acquisitions strategy. Critique the use of pro-forma earnings for financial statement analysis

  Compute the break-even sales

Determine for 2008 (a) the unit variable cost and (b) the unit contribution margin. Compute the break-even sales (units) for 2008. Compute the break-even sales (units) under the proposed program

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd