1)Which of the following statements about default risk and interest rate risk is NOT TRUE?

Select one:

a.

When a lenders risk is high, the borrower's debt costs are always low.

b.

Lenders face default risk, or the risk of not being paid,

c.

Assets financed by the debt can serve as collateral for the debt, lowering the default risk for the lender.

d.

Lenders are also exposed to interest rate risk, or the risk that interest rates will fluctuate over the maturity of the loan.

2)Predatory lending can be characterized by all of the following EXCEPT:

Select one:

a.

excessively high interest rates

b.

highly questionable terms

c.

unnecessary charges

d.

it takes into account a borrower's ability to repay the loan

3)Which of the following statements regarding the Saskatchewan Indian Equity Foundation (SIEF) is INCORRECT?

Select one:

a.

SIEF is not-for-profit and generates revenue from the interest on the loans it makes.

b.

SIEF will lend up to a maximum of $300,000.

c.

SIEF charges interest rates around 12%.

d.

SIEF has only been in existence for 10 years

4)All of the following are examples of macroeconomic factors that impact one's ability to purchase a home EXCEPT:

Select one:

a.

employment history

b.

liquidity in credit markets

c.

interest rate levels

d.

expected inflation