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1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Types of Receivables

Financial Accounting

7. Receivables and Investments

Types of Receivables

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Multiple Choice

Which of the following loan-to-value (LTV) ratios is considered low?

40%

100%

95%

80%

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Understand the concept of Loan-to-Value (LTV) ratio: The LTV ratio is a financial term used by lenders to express the ratio of a loan amount to the value of the asset purchased. It is calculated as:

\frac{Loan}{Value}

. A lower LTV ratio indicates less risk for the lender because the borrower has more equity in the asset.

Compare the given LTV ratios: 40%, 100%, 95%, and 80%. A lower percentage means the borrower is financing a smaller portion of the asset's value, which is considered less risky.

Identify the lowest LTV ratio among the options provided. The lowest ratio represents the least risk for the lender and is considered a low LTV ratio.

Understand why a low LTV ratio is favorable: A low LTV ratio means the borrower has a higher equity stake in the asset, reducing the lender's exposure to risk in case of default.

Conclude that the lowest percentage among the options is the correct answer for a low LTV ratio.