True or False with explanation

a. If a person enjoys high net worth, he may still suffer from financial difficulties, like insolvency.

b. The deposit protection scheme protects banks from the existence of bank run due to the spread of rumors about the healthiness of the banking system.

c. John is considering purchasing a car by taking a 5-year loan which charges him an annual interest rate of 8%. If he can afford a down payment of $40,000 and a monthly payment of $5,000 which is paid at the end of each month, the maximum amount he can spend on the car is $286,592.

d.

Given that the maximum loan-to-value ratio is 70%, mortgage plan A is more suitable to a home buyer if he is going to buy a flat at $6.8M and afford a maximum down payment of $2.1M and he will sell the flat out after 5 years. (Ignore the mortgage insurance programme)

	A	B
Mortgage rate	2.6%	2%
Estimated value	7M	6.5M
Cash reimbursement	0.8% of loan value	1.5% of loan value
Interest penalty period	5% of loan value within the first two years.	5% of loan value within the first four years.