Charles Buys a House and Waits Till Its Value Rises

question 41

Multiple Choice

Charles buys a house and waits till its value rises.He then resells the house to make a big profit.This act of making profit by reselling is referred to as ________.

• A) credit swapping
• B) flipping
• C) defaulting
• D) foreclosing
• E) securitization

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Definitions:

Active Market

A financial market in which securities or commodities are frequently traded, showing significant liquidity and pricing information.

Significant Influence

Refers to the power to participate in the financial and operating policy decisions of an investee but is not control or joint control over those policies.

Voting Shares

Shares that give the shareholder the right to vote on corporate matters, such as electing the board of directors and approving policies.

Voting Shares

Shares of a company that give the shareholder the right to vote on corporate matters and board elections.