Monday, December 9, 2013
Chapter 13 Extra Credit
1) Home ownership not only satisfies the need for space, but also provides economic and psychological benefits.
2) Individual borrowers can optimize their interest rate-discount rate selection if they know the lender’s payoff assumption and are able to accurately anticipate their own payoff.
3) All businesses need the same amount of real estate in order to be successful.
4) Real estate can contribute to a corporation in three ways: as a trading base, as a cost of operation or a factor of production, and adds to the overall value of the corporation.
5) A corporation should own all of its real estate to profit from the operational and strategic support of the space.
6) ________ is a residential mortgage structure whose payments begins below the fixed-rate, fully amortized mortgage payment but are systematically increased on a predetermined basis until in later years they exceed the fully amortized payment.
a. Interest-only mortgage
b. Partially amortizing mortgage
c. Graduated payment mortgage
d. Reverse annuity mortgage
7) A loan charge designed to cover the lender’s costs of processing the application and loan is called a _____.
b. Origination fee
d. Negative amortization
8) For a given site, a weak score in one characteristic can be compensated for by a strong score in another characteristic. This is called ________.
a. Location decision
b. Corporate strategy
c. Tenure decision
Answers: 1)A 2)A 3)B 4)B 5)B 6)C 7)B 8)D