Review Questions 51.docx
- 文档编号:29483866
- 上传时间:2023-07-23
- 格式:DOCX
- 页数:20
- 大小:269.18KB
Review Questions 51.docx
《Review Questions 51.docx》由会员分享,可在线阅读,更多相关《Review Questions 51.docx(20页珍藏版)》请在冰豆网上搜索。
ReviewQuestions51
FIN2108ReviewQuestions5.1
Reviewquestion5.1
5.1.1Pleaseattemptquestions1-3;5-7onpages171-2ofSathyeetal..
5.1.2BankAusesacapacity-to-repaycriteriatodeterminethemaximumamountthatapersonalcustomercanborrow.Thecriteriaisthatmaximumrepaymentis40%ofgrossmonthlyincome.Thecustomerhasanannualincomeof$60,000,andtheloaninquestionisa30yearloanwithmonthlycompoundingat6%.Whatisthemaximumloanthebankwillextendtothecustomer?
5.1.3Whatlaws/regulationsareparticularlyimportantintheareaofconsumerlending?
5.1.4FredSmithhasjustpurchasedanewcarvaluedat$42800.Hepaida10%depositandborrowedtheremainderfromhisbank.Thetermsofhispersonalloanareamaturityof5years,monthlyrepayments(madeattheendofeachmonth)andaninterestrateof15%compoundedmonthly.
1.HowmuchareFred’smonthlyrepayments?
2.IfFredwantedtorepaytheremainderoftheloanattheendofthethirdyear(atthetimeofmakingthatmonthlyrepayment),howmuchwoulditcosthim,assumingtherearenopenaltiesforearlyrepayment?
3.Whatdollaramountofthisrepaymentmadeattheendofthethirdyearisinterest?
5.1.5Joehasmanagedtosaveadeposittowardsaboat.Theboatcosts$95,000andJoeborrows$80,000towardsthis.Thecontractrequiresequalpaymentsattheendofeachquarterovera15yearperiod.Theinterestrateiscurrently8%compoundedquarterly.
1.Whatwillbetheamountofeachquarterlypayment?
2.Aftermakingthe40thpayment,Joedecidestorepaytheloaninfull.Howmuchwillheneedtopay?
3.Ofthisfinalpayment,howmuchisprincipalandhowmuchisinterest?
5.1.6Whataremarginloans?
DiscussrecenttrendsinmarginlendinginAustralia.
5.1.7
ConsideringtheloanapplicationformsavailableontheMECUwebsite.Whatarethesimilaritiesanddifferencesbetweentheinformationrequirementsofpersonalversuscreditcardloans?
5.1.8Pleaseattemptquestions1,2,8onpages691-2ofK&M.
5.1.9Fillintheblanksthefollowingdiagramoutliningtheflowofacreditcardtransaction
Chapter5
Consumerlending
ReviewQuestions5.1.1
Q1.Whatisconsumerlending?
Whatareitsvarioustypes?
A.Consumerlendingorcreditreferstotheloansrequiredbyindividualsorhouseholdstomeetpersonalneedssuchastravelorthepurchaseoffurniture,householdappliances,motorvehicles,boatsorhomes.However,confusionprevailsaboutwhatconstitutesconsumerlending.Forourpurposes,consumerlendingincludespersonalloans(includingmarginloans)andcreditcardloans.Homeloansarealsogiventoindividualsandhouseholds.Iftheyareowneroccupied,theycouldbeincludedunderconsumerloans.However,giventhelargemagnitudeofsuchloans,theseloansaretreateddistinctfrompersonalandcreditcardloansinthiscourse.
Q2.WhatfactorshaveleadtorapidgrowthofconsumercreditinAustraliainrecentdecades?
A.ThereareseveralfactorsthathavecontributedtorapidgrowthofconsumercreditinAustralia.Theseinclude:
1.Continuingeconomicexpansion:
AstheFigureillustrates,AustralianGDPhasgrownconsistentlysincethe1970s,buthasexperiencedoccasionaldeclines.Includedamongtheseweredeclinesintheearly1980sandearly1990s.However,onthewhole,the1980s,1990sandearly2000swereaperiodofrelativelystablegrowththatproducedanalmostunprecedentedperiodofprosperity,aidedinparticularbygrowthintheminingandservicessectors.
Figure5.1:
Australia’sGDP1970-2008
DataSource:
RBAStatisticsTableG10 //www.rba.gov.au/Statistics/AlphaListing/alpha_listing_g.html> 2.Lowinflationregime: TherateofpriceriseorinflationismoderateinAustralia.AsperthemonetarypolicyoftheReserveBankofAustraliatheinflationwastargetedtomoveinthebandof2to3percentperannum.Ithasgenerallyremainedsoinrecentyears(althoughitiscurrentlyabout3.1%–seewww.rba.gov.au).Lowinflationspursbuyingandhencehigherdemandforcredit. 3.Lowinterestrates: Thestructuraldeclineininflationandinterestratesexplainsmuchoftheriseinconsumercreditandbuyingbyowner-occupiers.Theeffectsofthegainsinwealthontheirbehaviourarestillworkingtheirwaythroughtheeconomy. Thus,duetotheriseinpersonalincomeandhouseholdexpenditure,thedemandforconsumercredithasbeenrapidlygrowing.Thatdemandindicatesconsumerconfidenceandiscarefullywatchedbythegovernmentandcentralbankofthecountry.Householddisposableincomehasgrownsteadilysincethe1960s,andinrecentyearshasaveragedaround4.8%afterinterest. Q3.Whatarecredit-scoringmodels? A.Creditscoringmodelsareacreditassessmenttoolusedbymanylendinginstitutions.Theyhaveseveraladvantagesoverthetraditionaljudgementalsystemofcreditriskassessment.Theseincludetheabilityofthecreditscoringmodelstohandlealargevolumeofcreditapplications,fastprocessingofapplications,loweroperatingcost,savingintrainingcostandcustomerconvenience.Thesemodelsaredevelopedusingstatisticalmodels.Inthesemodelsseveralvariablesaresimultaneouslyusedtoarriveatacreditscoreorrankingforeachapplicant.Ifthescoreexceedsthepre-determinedcutoffscore,thentheapplicationisautomaticallyapproved.Thevariablesusedincreditscoringmodelsincludeage,maritalstatus,numberofdependents,homeownership,incomebracket,creditrating,timeincurrentemployment,timeatcurrentaddress,numberofbankaccountsheld,thetypeofaccountsheldandcreditratingetc.Thesemodelsattempttosegregatethegoodloansfrombadloansbasedonthepastexperienceofthebank.Thebankcollectsdataofloansthathaveprovedtobesoundandthosethathaveprovedtoberiskyagainsteachoftheaboveparameters,thenrunsastatisticalmodellikearegressionordiscriminantanalysisthatgivestherelativeweightsorpointsforeachoftheabovevariables.Theseweightsarethenusedforconstructingacredit-scoringmodelagainstwhichallapplicationsareevaluated.Thescoringmodelsaredynamic,thatis,theyaretestedandre-testedperiodicallyandrevisedifnecessary. Q5.ChangingdemographicsinAustraliaareexpectedtohavesubstantialeffectsonabank’sconsumercreditprograms.OutlinethechangestakingplaceindemographicsinAustraliaandhowthesemayhaveanimpactonconsumercreditprogrammes. A.AccordingtotheFinancialSystemsInquiryFinalReport(popularlyknownastheWallisReport,1997)theimportantdevelopmentsthatarechangingcustomerneedsincludethefollowing: Ageingofthepopulation: AsperreportofAustralianBureauofStatisticsapproximately17.5percentoftheAustralianpopulationwillbe‘old’,thatis,above65yearsofagecomparedto11.9percentin1995and8.3percentin1970.Asaresultgovernmentshavestartedsuperannuationschemestoreducethedependenceofretireesonagepension.Henceretirementproductswillhavegreaterdemand.Therecouldbedemandforcredittomeetmedicalexpenses,travelandleisureetc. Changesinworkpatterns: Thereisatrendtowardsearlyretirementandpercentageofpeopleinfulltimeemploymentaftertheageof55declinedfrom33percentto22percentbetween1966to1996.Similarly,manypeopleareinpart-timeemploymentandmayliketousetheirfreetimetoundertakecertainactivities.Itispossiblethatthesepeoplemayliketostartsomesmallbusinessrequiringbankcredit. Increasingvalueawareness: Consumerswillseekthosefinancialproductsthatofferbestvalueformoney.Theyarebecomingmorepricesensitivetotransactionfeesaswellasinterestrates.Creditproductswillhavetobecompetitivetotakecareofthisvalueawarenessamongconsumers. Willingnesstoadopttechnology: Consumersarebecomingmoretechnologysavvyandelectronicbankingproductshaveseenasurgeindemand.Theconvenienceandlowcostthatelectronicbankingoffersmakesitveryattractiveforconsumers. (note: theWallaceReportisabitoldnow.Whatrecenttrendsdoyouseeatworkthatarenotmentionedabove? DT ThefollowingaresomesuggestionsprovidedbyNathanStumbris: a)Givenchangestothesuperannuationportfoliosofmany50+yearoldretirees,theirworkpatternsarenowsubjecttochange.Theyarelookingtoworklongerinordertocontinuetobuildsavingsfortheirretirement b)Peopleovertheageof65arestilllookingtoworkandinfailuretofindit,aremovingintothesmallbusinesssectorlookingtogenerateincome c)GenerationYconsumersarestartingtoadjusttheirspendingpatternstoobtainhousesatanearlierage,eveninsomecasesenteringintoacontractwithmultiplepartiestopurchaseahomeinanefforttoensureaffordabilitywhilstconsideringtheirindividualleverage. d)Consumerconfidenceinthefinancialsystemmightbedamagedandpreferencefordebtmaybechanging.Thereisevidencethatconsumerswerechoosingtouseexcessincometopayoffdebtratherthanforconsumption. Q6.CreditscoringoftheapplicationofMsMajellaBurke Majella: Assistantintravelagency 7 Tony: skilledworker 8 Lengthoftimeinthejobabout1yearMajella 2 Lengthoftimeinthejobabout1yearTony 2 Lengthoftimeatcurrentaddresslessthan1year 1 Ownhome 6 Telephone 2 Car 2 BTinvestments 3 Insurance 4 Creditrating 5 Totalcreditscore 42 A.Decision: loanapprovedascreditscoreexceedsthecutoffof40points. ScoringvaluesseemtobetakenfromTable5.1onp.157.However,noinformationisgiveninthetableconcerningscoringforcar,BTinvestments(maybeconsideredequivalenttoasavingsaccount)orInsurance.
- 配套讲稿:
如PPT文件的首页显示word图标,表示该PPT已包含配套word讲稿。双击word图标可打开word文档。
- 特殊限制:
部分文档作品中含有的国旗、国徽等图片,仅作为作品整体效果示例展示,禁止商用。设计者仅对作品中独创性部分享有著作权。
- 关 键 词:
- Review Questions 51