Which of the Following Is FALSE Regarding Interest Only Loans

question 16

Multiple Choice

Which of the following is FALSE regarding interest only loans?

• A)They usually have balloon payments
• B)They have greater amortization than conventional loans
• C)They may result in more cash flow to the investor
• D)They may allow for a lower DCR

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Definitions:

Accounts Receivable

The sums of money due to a company for goods or services that have been delivered or used but not yet paid for by customers.

Net Working Capital

Net working capital is the difference between a company's current assets and current liabilities, indicating its short-term liquidity and ability to cover short-term obligations.

Drainage Pond

An artificial or natural pond designed to collect and retain stormwater or runoff, helping to manage excess water and prevent flooding.

Accounts Receivables

Money owed to a business by its customers for goods or services delivered or used but not yet paid for.