If Interest Rates Are Expected to ________, Mortgage Real Investment

question 7

Multiple Choice

If interest rates are expected to ________, mortgage real investment trusts (REITs) ___________.

• A)decline; become less attractive
• B)rise; become less attractive
• C)rise; are not affected
• D)decline; are not affected

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Definitions:

Capital Intensive

A business process or industry that requires large amounts of money and financial resources to produce a good or service.

Break-even Point

The juncture where the sum of all expenses matches the sum of all income, leading to neither a profit nor a deficit.

Variable Expense

Expenses that vary directly with the amount of production or the degree of operational activity.

Contribution Margin Ratio

The percentage of each sale that exceeds the variable costs of production.