James Mortgaged His House and Received a Certain Amount of Money

question 18

Multiple Choice

James mortgaged his house and received a certain amount of money in return as a loan. However, he repaid half the loan in six months. Which of the following is likely to be true in this scenario, at the present moment?

• A)The mortgagee has an insurable interest towards 25 percent of the loan amount.
• B)The mortgagee does not have an insurable interest in the loan amount.
• C)The mortgagee has an insurable interest towards the entire loan amount.
• D)The mortgagee has an insurable interest towards half the loan amount.

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Definitions:

Production Possibilities Curve

A graphical representation that shows the maximum quantity of one good that can be produced for every possible quantity of another good produced, given the available resources and technology.

Consumer Goods

Products and services that are purchased for personal use or consumption by the general public.

Capital Goods

Goods that are used in producing other goods and services rather than being bought by consumers.

Opportunity Cost

The cost of forgoing the next best alternative when a decision is made to choose one option over another.