In Order to Better Understand a Borrower's Probability of Default

question 1

Multiple Choice

In order to better understand a borrower's probability of default, lenders have a number of tools at their disposal. The ratio that measures the percentage of the price (or value) of a property that is encumbered by the first mortgage is referred to as the:

• A) debt coverage ratio (DCR)
• B) loan-to-value ratio (LTV)
• C) break-even ratio (BER)
• D) price-earnings ratio (PE)

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Definitions:

Skull

The bony structure forming the head, protecting the brain and supporting the structures of the face.

Sensory Impulses

Electrical messages that are transmitted along sensory neurons, carrying information from sensory receptors to the central nervous system.

Optic Nerve

A paired nerve that transmits visual information from the retina to the brain.

Ciliary Body

A part of the eye that includes the ciliary muscle, which controls the shape of the lens for focusing, and the ciliary epithelium, which produces the aqueous humor.