When It Comes to Subprime Loans

question 12

Multiple Choice

When it comes to subprime loans:

• A) Low-income whites living in low-income neighborhoods are more likely to have a conventional loan than high-income African Americans living in predominantly African American areas
• B) Low-income African Americans in low-income neighborhoods are more likely to have a conventional loan than high-income whites living in predominantly white areas
• C) There is very little difference by race, income is what matters
• D) Most of the difference is due to region of the country rather than race

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Definitions:

Residual Income

The income that remains after subtracting all required costs of capital from operating profit.

Throughput Time

The amount of time taken for a product to pass through all stages of production from start to finish, including processing time, wait time, and move time.

Manufacturing Cycle Efficiency

A metric that measures the efficiency of the manufacturing process, calculated as the value-added time divided by the total cycle time.

Non-Value-Added

Activities or processes that do not add value to the product or service from the customer's perspective, leading to unnecessary costs.