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REE4204 2 FINAL EXAM QUESTIONS WITH VERIFIED ANSWERS
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REE4204 2 FINAL EXAM QUESTIONS WITH VERIFIED ANSWERS
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REE4204 2 FINAL EXAM QUESTIONS WITHVERIFIED ANSWERS
What is the market value? - ✔✔the average price the market is willing to
pay for that asset
What is financial leverage and why do you care about it? -
✔✔positive (favorable) leverage increases your rate of return
What is a call option? - ✔✔the ability to pay off the loan early
, What is a put option? - ✔✔allows the borrower to put the property in place
of the debt
what is the function of an intermediary? - ✔✔its a 3rd party (mortgage
lender) that helps argue a contract
What is an efficient market? - ✔✔things being placed efficiently
What kind of market is the real estate market? - ✔✔weak form efficiency
Why was there little need for mortgage lending in the colonial US? -
✔✔people used to build their own cabins and they claimed land and
homesteaded
Why was financing needed for post-civil war expansion? - ✔✔they would
sell their farms to move out west and they needed financing to buy a new farm
What was real estate like in 1920's? - ✔✔a lot of real estate was built
and financed, the economy boomed
Why was the 1930's the most memorable period in US history? -
✔✔recession, half of the homes in the US were in default by 1933, property
values plummeted
How did the federal government respond to the events that took place in the
1930's? - ✔✔they created government jobs including FHLB,FSLIC, FHA,
fannie mae
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