If an investor owned an equity position in a building and wanted to increase value using leverage he could do so by either leveraging the property or borrowing personally.However,leverage is usually applied at the property,not the personal level because:
A) the investor could make the personal loan against cash flows from the property,leaving the property available as collateral for additional loans
B) the investor cannot take personal loans to leverage an increased value based on cash flows
C) leverage can be created cheaply from personal loans; it is not added value
D) personal loans cannot be applied to cash flows; only to real property
Correct Answer:
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Q12: The value of mortgage-backed securities changes as
Q13: Interest rate risk for thrifts occurs partially
Q14: A call option on a mortgage is:
A)
Q15: An agent is:
A) someone retained by a
Q16: If the current market price of a
Q18: Positive financial leverage occurs when:
A) the asset
Q19: For commercial property,a larger down payment is
Q20: Agency costs include:
A) agent costs,bonding costs,and monitoring
Q21: Weak-form market efficiency exists:
A) when the price
Q22: Pass-through Mortgage Backed Securities (MBSs)provide the investor
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