Part of the documentation to support loan

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Reference no: EM132069598

1. According to the capital asset pricing model,

a. an investor who is risk averse should hold at least some of the risk-free asset in his portfolio

b. a stock with high risk, measured as standard deviation of returns, will have high expected returns in equilibrium

c. all the investor who take on risk will hold the same risky-asset portfolio

d. Beta is the slope of security market line

2. When is a lessor’s agreement always justified as part of the documentation to support a loan?

When the loan is secured by equipment owned by the lessor

When the loan is secured by real estate

When the loan is secured by equipment

When the borrower rents the space where the business is located

3. For non-titled property such as equipment, what should a business bank use to help verify ownership?

Tax depreciation schedule

Equipment serial number

Sales receipt

Real estate records.

4. An investor purchased 500 shares of Akley common stock for $42,000 in a margin account and posted initial margin of 50%. The maintenance margin requirement is 30%. The price of Akley, below which the investor would get a margin call, is closet to:

a) 50

b) 65

c) 60

d) 55

Reference no: EM132069598

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