The Demand for Housing Is Characterized by a Regular Pattern

question 12

Multiple Choice

The demand for housing is characterized by a regular pattern of increasing to a peak,then falling.When the demand reaches a low point,it then repeats the pattern.This pattern usually takes place over a three- to five-year period.This is an example of which type of demand pattern?

• A)Autocorrelation
• B)Seasonality and cycles
• C)Step change
• D)Trend

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Definitions:

Discount Rate

This is the interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Salvage Value

The expected sale price of an asset at the end of its effective life.

Net Operating Cash Flows

The amount of cash generated by a company's normal business operations after paying operating expenses and taxes.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.