If the Down Payment for a $250,000 Home Is $50,000

question 23

Multiple Choice

If the down payment for a $250,000 home is $50,000 and the mortgage is $200,000, the leverage ratio is:

• A) 0.25.
• B) 1.25.
• C)4.
• D) 5.

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Definitions:

Unsecured Bond

A type of bond that is not backed by collateral, relying solely on the issuer's creditworthiness.

Secured Bond

A type of bond that is backed by collateral, providing greater assurance to the lender that principal and interest payments will be made.

Equity Bond

An investment instrument that combines features of both equity and debt, often structured to convert to equity under certain conditions.

Income Bond

A bond that pays interest to its holders only if the issuing company has earned enough profits to cover the interest payments.