To Determine Whether a Home Is Affordable, Most Homebuyers Focus

question 60

Multiple Choice

To determine whether a home is affordable, most homebuyers focus on

• A)the price of the home.
• B)cost of servicing the mortgage compared to take-home pay.
• C)interest rates.
• D)how much the home price has changed in recent years.

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Definitions:

Quick Ratio

A measure of a company's ability to meet its short-term obligations using its most liquid assets, calculated as (cash + marketable securities + accounts receivable) / current liabilities.

Current Ratio

This ratio assesses a firm's capacity to cover its obligations due in the next year by comparing its current assets to its current liabilities.

Interval Measure

A financial metric used to determine how long a company can operate with its available amount of current assets, calculated usually in months.

Time-Trend Analysis

A method of forecasting future data points by analyzing the patterns of historical data over time.