Which of the following is not among the "Cs" relevant for mortgage underwriting? (6 Points) Creditworthiness Credibility Capacity Collectability Collateral Career How would you define the Housing Expense Ratio? (4 Points) The share of monthly income that used to pay for a mortgage. O The part of the net income that is used for paying for housing and income taxes. O The share of the monthly gross income used to pay housing related expenses such as mortgage payments, property taxes, and house insurances. O The share of your monthly income covering expenses for mortgages, income taxes, property taxes, retirement and unemployment insurance. Over the last decades, the FICO score became a powerful tool for lenders to determine whether loans can be granted. Automated underwriting processes based on the credit score have mostly replaced more traditional approaches. (2 Points) True O FalseA friend told you that they want to move out of the city in five years. You really like the house they are owning. Your friend is willing to sell you the house for $300,000 in five years. You try to understand how you could be able to pay the money in five years. While researching, you find an offer for a yearly compounding investment opportunity which pays 8% interest. How much will you have to invest right now to hold the necessary $300,000 in five years? Please round to the next full $1,000. (10 Points) Your answer What is a lump sum payment? (4 Points) A payment that occurs regularly at the end of a period. Today's value of a cash flow in the future. A one time payment. )The sum of all payments that are expected from one particular financial project. In the real world risk can be ignored, as investments are normally safe and yield the expected payouts. (2 Points) True FalseYou have two investment options. You can either invest $5,000 today once for ten years at an interest rate of 12%/year compounding on a yearly basis or you can invest the same amount of money for the same period of time in another project that has a yearly interest rate of 10% and compounds on a monthly basis. Assuming that both investments are completely risk free, which option will be better for you? (8 Points) Option 1 Option 2 O Both are the same. O The question does not include enough information to answer it. O Depending on the risk aversion of the investor, it could be either Option 1 or Option 2. Your friend told you about a new real estate fonds that you should absolutely consider when investing money in the future. You would have to pay a monthly fee of $100 and could receive a monthly compounding interest rate of 0.5%. You receive a one time payment when the fonds is due. Given this information, should you invest in the fonds? (4 Points) O Invest in the fonds! O Better invest in other opportunities! O We do not have enough information for a well educated decision