Imagine that you are in the position of buying loans in the secondary market (that is

Chapter 27, Problem 6

(choose chapter or problem)

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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