Janet Is Considering the Purchase of a Condo for $150,000

question 49

Multiple Choice

Janet is considering the purchase of a condo for $150,000 during a recession phase, partly financed by a mortgage. She is due to retire in a few years. If she cannot make her mortgage payments on time, she is bound to incur a:

• A)neutral equity on her property.
• B)reduced residual value of the property.
• C)higher rent ratio.
• D)foreclosure of her house.
• E)fine from the local government.

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Definitions:

Interest Basis

A method used to calculate interest payments, based on how the interest accrues over time.

Par Value

The face value of a bond or stock, representing the amount returned to the holder at maturity.

Common Stock

Equity ownership in a corporation, granting voting rights and a share in profits through dividends.

Semi-Annual

Semi-Annual refers to something occurring or done twice a year, typically every six months.