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are144-s08-midtermva_key - Eric Johnson ARE 144 Spring 2008...

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Eric Johnson Name:__________________ ARE 144 Student ID:______________ Spring 2008 Josh Hanosh Ellen Banh ARE 144 Midterm Multiple Choice : Please read each question carefully and choose the BEST answer. (2 points each) 1. One of the first amortizing mortgages was the constant amortization mortgage. Which of the following characterized the components of the CAM payment over the life of the loan? A. A Above. B. B Above. C. C Above . D. D Above. 2. Risk is an important component of interest rates. Which of the following risks is not a determinant of interest rates? A. Default Risks B. Interest Rate Risks C. Institutional Risks D. Marketability Risks 3. What type of estate lasts for an indefinite period of time? A. Freehold estate B. Estate from year to year C. Leasehold estate D. Estate for years 4. Ted Bundy took out a 30-year 6.66% 99,000 loan to finance his new house. Which of the following monthly payments would partially amortize his loan? A. $645.33 B. $899.45 C. $606.55 D. $638.20 E. Not enough info to solve
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5. Miller bought an apartment complex 19 years ago and is considering selling it. He would like to sell it at the end of the 20 th year. He financed $523,000 at 8.5% with a traditional 30-year mortgage. What is his mortgage balance at the end of the 20 th year? A. $344,111 B. $326,057 C. $324,345 D. $322,621 E. None of the above are remotely close 6. What type of estate do most students have when they agree to lease an apartment for 1 year? A. Freehold Estates B. Non Freehold Estate C. Determinable Fee D. Exclusive Possession E. Joint Tenancy 7. Bob just purchased a new house. When purchasing the house, he found that PG&E had the legal right to access his property to repair their wires. What is this legal right called? A. Restrictive Covenant B. Easement C. Lien D. Adverse Possession E. Eminent Domain Use the following information to answer the next 2 problems: Joe is considering buying a 2500 sqft house in Natomas for $366,000. He decides to visit his local bank to see what kind of loan he can get for his potential home. Right away the loan officer tells him about a promotional ARM that will let him pay interest only payments at a rate of prime minus 2% for the first 3 years. Prime = 5%
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are144-s08-midtermva_key - Eric Johnson ARE 144 Spring 2008...

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