ch12 - Financial Markets and Institutions, 6e...

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Unformatted text preview: Financial Markets and Institutions, 6e (Mishkin/Eakins) Chapter 12 1 The Mortgage Markets 12.1 Multi ple Choi ce 1) Which of the following are important ways in which mortgage markets differ from the stock and bond markets? A) The usual borrowers in the capital markets are government entities and businesses, whereas the usual borrowers in the mortgage markets are individuals. B) Most mortgages are secured by real estate, whereas the majority of capital market borrowing is unsecured. C) Because mortgages are made for different amounts and different maturities, developing a secondary market has been more difficult. D) All of the above are important differences. E) Only A and B of the above are important differences. Answer: D Question Status: Previous Edition 2) Which of the following are important ways in which mortgage markets differ from stock and bond markets? A) The usual borrowers in capital markets are government entities, whereas the usual borrowers in mortgage markets are small businesses. B) The usual borrowers in capital markets are government entities and large businesses, whereas the usual borrowers in mortgage markets are small businesses. C) The usual borrowers in capital markets are government entities and large businesses, whereas the usual borrowers in mortgage markets are small businesses and individuals. D) The usual borrowers in capital markets are businesses and government entities, whereas the usual borrowers in mortgage markets are individuals. Answer: D Question Status: Previous Edition 3) Which of the following are true of mortgages? A) A mortgage is a long- term loan secured by real estate. B) A borrower pays off a mortgage in a combination of principal and interest payments that result in full payment of the debt by maturity. C) Over 80 percent of mortgage loans finance residential home purchases. D) All of the above are true of mortgages. E) Only A and B of the above are true of mortgages. Answer: D Question Status: Previous Edition 4) Which of the following are true of mortgages? A) A mortgage is a long- term loan secured by real estate. B) Borrowers pay off mortgages over time in some combination of principal and interest payments that result in full payment of the debt by maturity. C) Less than 65 percent of mortgage loans finance residential home purchases. D) All of the above are true of mortgages. E) Only A and B of the above are true of mortgages. Answer: E Question Status: Previous Edition 5) Which of the following are true of mortgages? A) Prior to the 1920s, U.S. banking legislation discouraged mortgage lending by banks. B) In the 1920s,...
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This note was uploaded on 10/17/2011 for the course ECON 317 taught by Professor Guidry during the Spring '11 term at Nicholls State.

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ch12 - Financial Markets and Institutions, 6e...

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