An Increase in Either the Risk-Free Rate or the Risk

question 41

True/False

An increase in either the risk-free rate or the risk premium on a fixed-rate mortgage results in a higher required rate of return when investing in the mortgage and therefore causes the mortgage price to decrease.

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Definitions:

WTO's Dispute Settlement Board

An entity within the World Trade Organization that deals with disputes between member countries regarding the interpretation and application of the WTO agreements.

Uruguay Round Agreements

A series of international trade agreements concluded in 1994, which established the World Trade Organization and aimed to reduce trade barriers worldwide.

World Trade Organization

An international organization that regulates international trade.

New World Order

A set of initial conditions that describes how nation-states relate to one another on a global scale.