25. Assume that a borrower has a choice between two comparable fixed-rate mortgage loans with the same interest rate, but different mortgage terms, one being a 30-year mortgage and the other a 15-year mortgage. Under financially unconstrained circumstances, which of the following statements best describes the borrower’s preference? a. The borrower would prefer the 30-year mortgage. b. The borrower would prefer the 15-year mortgage. c. The borrower would be indifferent between the two mortgages. d. The borrower is unable to compare mortgage loans of two different maturities. * 26. With the recent popularity of adjustable-rate mortgages (ARM), lenders have begun to offer ARMs with different adjustment periods. Which of the following ARM choices will most likely have the highest initial rate and/or up-front financing costs? *
6 27. In making single-asset real estate investment decisions, the first pass often involves calculating a series of returns, ratios, and multipliers. Which of the following is often cited as a limitation associated with this type of analysis? * 28. The key to meaningful valuations in real estate is to use defensible cash flow estimates. All of the following statements are true in regards to generating accurate cash flow estimates EXCEPT: * 29. The going-in capitalization rate can vary significantly by property quality. Which of the following classes of properties within a particular property type would be expected to have the highest cap rates? a. Class A properties b. Class B properties c. Class C properties d. Cap rates would be equal across all classes within the same property type *
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- Fall '12
- Mortgage loan, Home Mortgage, home mortgage loans