Lenders Commonly Use a TDS Ratio of _________ and a GDS

question 4

Multiple Choice

Lenders commonly use a TDS ratio of _________ and a GDS ratio of __________ to help determine the amount most people can comfortably afford for housing.

• A)20%; 30%
• B)40%; 20%
• C)40%; 30%
• D)30%; 20%
• E)20%; 40%

Distinguish between variable and fixed expenses in financial forecasting.

Understand how desired profit margins influence sales targets.

Know the significance of retention (plowback) ratio in financial growth and planning.

Comprehend the role of dividend policy in financial management.

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Definitions:

Negotiability

The feature of a financial instrument that allows it to be transferred or assigned freely from one party to another.

Default

Failure to fulfill a legal obligation, especially failing to make a required payment on a loan or financial agreement.

Time Instrument

A financial document or negotiable instrument that promises payment of a certain sum of money at a future date, as opposed to on demand.

Payment

A financial transaction where money is transferred in exchange for goods or services.