• 2022-06-05
    Which of the following describes a subprime mortgage?
    A: The rate of interest is less than the prime rate of interest
    B: The loan-to-value ratio is below average
    C: The life of the mortgage is less than 25 years
    D: The credit risk is high
  • D

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    • 0

      Investors will be willing to pay more than the par value for bonds when the market rate of interest is higher than the contract rate of interest. ( )

    • 1

      If the inflation rate is zero, then A: both the nominal interest rate and the real interest rate can fall below zero. B: the nominal interest rate can fall below zero, but the real interest rate cannot fall below zero. C: the real interest rate can fall below zero, but the nominal interest rate cannot fall below zero. D: neither the nominal interest rate nor the real interest rate can fall below zero.

    • 2

      A 15-year mortgage will have larger monthly payments than a 30-year mortgage of the same amount and same interest rate.( )

    • 3

      If a country had deflation, A: the nominal interest rate would be greater than the real interest rate. B: the real interest rate would be greater than the nominal interest rate. C: the real interest rate would equal the nominal interest rate. D: None of the above is necessarily correct.

    • 4

      According to the passage, a home mortgage plan ______. A: is similar to a mortgage loan B: is absolutely different from a mortgage loan C: has more benefits than a mortgage loan D: None of the above is correct.