The position of buying loans in the secondary market
Course:- Business Economics
Reference No.:- EM131101686

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Imagine that you are in the position of buying loans in the secondary market (that is, buying the right to collect the payments on loans made by banks) for a bank or other financial services company. Explain why you would be willing to pay more or less for a given loan if: a. the borrower has been late on a number of loan payments b. interest rates in the economy as a whole have risen since the loan was made c. the borrower is a firm that has just declared a high level of profits d. interest rates in the economy as a whole have fallen since the loan was made.

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