chapter 6

1- No matter how how efficient or inefficient a market is at doing it, a market's major task is to:
a. establish a supply curve
b. establish a demand curve
c. establish prices
d. produce more space

2- If income in the market area went down:
a. supply curve shifts right.
b. demand curve shifts upward
c. supply curve shifts left
d. demand curve shifts downward.

3- The government formed the _____ in 1935 and charged it with the creation of secondary mortgage market for all real estate.
a. GSE
b. MPT
c. RFC
d. MBB

4- The real estate suppliers cannot respond to the demand curve shift because of the production lags prohibit it.
a. T
b. F

5-The severe price fluctuations have led to the conclusion that real estate markets operate in cycle.
a. T
b. F

6- FHA program was not insurance. It was a federal guarantee that required no insurance premium from borrowers, and the government would cover any losses due to borrower default.
a. T
b. F
correct answer is not FHA, it is VA.

7- The new residential business model make money by charging their borrowers origination fees for creating the loan.
a. T
b. F

8- While mortgage bankers borrowed their money short term, they treated their short term mortgages like long term assets to avoid the maturity mismatch risk.
a. T
b. F

correct answer: they treated long term mortgages like short term assets.

by: Mohammad Aljehani