Title: LOANS FOR WHICH THE ACQUIRED ASSET SERVES AS THE COLLATERAL
Abstract:ABSTRACT This paper addresses the loan environment in which (a) the asset funded by the loan serves as collateral for the loan, (b) the funded asset decreases in value over the period of the loan at a...ABSTRACT This paper addresses the loan environment in which (a) the asset funded by the loan serves as collateral for the loan, (b) the funded asset decreases in value over the period of the loan at a known constant rate, and (c) the loan is repaid in a finite number of equal end-of-period payments. Of particular concern are the conditions under which the value of the collateral may be less than the unpaid principal during the loan period, thereby creating an unwelcome situation for the lender. The loan interest rate is determined such that the unpaid loan principal is at all times equal to or smaller than the current market value of the collateral.Read More
Publication Year: 1995
Publication Date: 1995-01-01
Language: en
Type: article
Indexed In: ['crossref']
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