Monday, March 4, 2013

Chapter 6 questions- Jason Davies

1. (T/F). Subprime markets are the popular name for the market serving commercial mortgage borrowers who do not qualify for standard hence prime mortgages.

2. (T/F). Extraordinary returns is a term used to describe how quickly transaction prices within a market reflect relevant market information.

3. (T/F). Examples of real estate derivatives include mortgage-bcked securities and REIT shares.

4. (T/F). Mortgage securitization describes the process of creating mortgage-backed securities.

5. (T/F). Maturity mismatch describes the investment challenge typically faced by financial institutions that arise when long-term investments are funded with short-term liabilities.

6. Which of the following is not a characteristic of a perfectly competitive market.
a. Perfect Knowledge
b. Free Market
c. Critical Mass of Market Participation
d. Heterogenous Product

7. Which of the following people is not said to have a part in the real estate market crash?
a. Alan Greenspan
b. Barack Obama
c. George W. Bush
d. Bill Clinton

8. As long as Entrepreneurs have (fill in the blank), they will continue to develop space.
a. Capital
b. Resources
c. Securities
d. Efficient Markets

1. F 2. F 3. T 4. T 5. T 6. D 7. B 8. A

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