Mortgage lenders probably have the most interest in the ________ ratios.
A) return on assets and profit margin
B) long-term debt and times interest earned
C) price-earnings and debt-equity
D) market-to-book and times interest earned
E) return on equity and price-earnings

Question

Quizplus · Accepted Answer

Mortgage lenders are most interested in the borrower's ability to repay the long-term debt that is taken out for a mortgage. Therefore, they have a strong interest in the borrower's long-term debt and times interest earned ratios, which provide insight into their capacity to make interest and principal payments. Return on assets, profit margin, price-earnings, debt-equity, market-to-book, and return on equity ratios may provide some insight into a borrower's financial health, but they are unlikely to be as important to a mortgage lender as the long-term debt and times interest earned ratios.

Mortgage Lenders Probably Have the Most Interest in the ________