Johnson & Wales University Business and Finance Questions
Question Description
1. a. When a prepayment is made that is less than the full amount to completely pay off the loan, what happens to future monthly mortgage payments for a fixed- rate mortgage loan? b. What is the impact of a prepayment that is less than the amount required to completely pay off a loan?
2. What is the difference between a prime loan and a subprime loan?
3. For mortgage loans, what is prepayment risk?
4. a. What is a maintenance test? b. What is a debt incurrence test and when does it come into play?
5. Some credit analysts place less emphasis on collateral compared to covenants and business risk. Explain why.
6. In analyzing the labor situation in an industry in which a corporate issue operates, what should the credit analyst examine?
7. Explain whether you agree or disagree with the following statement: “ All duration- matching strategies are indexing strategies.”
8. The investment objective of the Threadneedle Bond Fund is “ To outperform the benchmark by 3% per annum ( gross of fees) over an 18– 24 month period” What type of fund is this?
9. What are the two ways in which the Markowitz mean- variance framework has been used by investors?
10. What are the difficulties of implementing the Markowitz mean- variance framework in constructing portfolios?
2. What is the difference between a prime loan and a subprime loan?
3. For mortgage loans, what is prepayment risk?
4. a. What is a maintenance test? b. What is a debt incurrence test and when does it come into play?
5. Some credit analysts place less emphasis on collateral compared to covenants and business risk. Explain why.
6. In analyzing the labor situation in an industry in which a corporate issue operates, what should the credit analyst examine?
7. Explain whether you agree or disagree with the following statement: “ All duration- matching strategies are indexing strategies.”
8. The investment objective of the Threadneedle Bond Fund is “ To outperform the benchmark by 3% per annum ( gross of fees) over an 18– 24 month period” What type of fund is this?
9. What are the two ways in which the Markowitz mean- variance framework has been used by investors?
10. What are the difficulties of implementing the Markowitz mean- variance framework in constructing portfolios?
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