Financial economics Value of the house 500,000. You are using a 30-year mortgage. Also, you are putting down 20%. You have two options: a. Mortgage rate of 4.5% with no points. b. Mortgage rate of 4.35% and 1.5 points. Which option should you choose?
Financial Economics A bank faces a pool of borrowers with measure one in two successive periods. In each period, each borrower wishes to borrow 1 unit from the bank. In each period, a low risk borrower’s project returns G = 2 with probability pg = 0.9 and 0 otherwise, while a high risk borrower’s project […]
Deposit insurance: How to deal with moral hazard in banking? The essay should contain 3 sections: i) Explaining the question posed(0,5 pages); ii) Summarizing most important literature (1 page), iii) Developing an answer: analytical, evidence-based (1,5 pages). The number of papers to use is 5. The papers must be from the leading (A) journals in […]
