As House Prices Go Up the Difference Between the Principal

question 33

True/False

As house prices go up the difference between the principal borrowed and the value of the house increases, which is referred to as negative equity.

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Definitions:

Dividend Payout Ratio

The proportion of net income a firm pays out to its shareholders in the form of dividends.

ROA

Return on Assets, a financial ratio indicating the profitability of a company relative to its total assets.

ROE

Return on Equity, a financial ratio that measures the profitability of a business in relation to shareholder's equity.