The Share of New Loans with a Down Payment of 5

question 105

Multiple Choice

The share of new loans with a down payment of 5 percent or less extended by Freddie Mac and Fannie Mae

• A) declined substantially after 1999.
• B) rose from 4 percent in 1998 to 12 percent in 2003 and 23 percent in 2007.
• C) rose from 4 percent in 1998 to 23 percent in 2002, but declined to less than 10 percent in 2007.
• D) never exceeded 10 percent of the new loans financed.

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Definitions:

Preferred Shares

A class of ownership in a corporation that has a higher claim on assets and earnings than common shares, often with dividends that are paid out before those of common shares.

Securities Act

U.S. legislation enacted in 1933 to regulate the sale of securities, primarily aimed at preventing fraud in the securities market.

Negligence

A failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances, resulting in unintended harm to another party.

Accountant

A professional who performs accounting functions such as audits or financial statement analysis according to established principles.