Fannie Mae and Freddie Mac Held a Competitive Advantage Over

question 654

Multiple Choice

Fannie Mae and Freddie Mac held a competitive advantage over other mortgage lenders primarily because

• A) they were established as non-profit entities and thus did not need to show that they were profitable.
• B) they could borrow funds cheaper than other lenders because their bonds were perceived to be backed by the federal government.
• C) they were allowed to institute higher loan standards than other banks and mortgage lenders.
• D) they were exempt from federal regulations monitoring lending practices.

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Definitions:

Goods and Services

Tangible products and intangible activities offered to consumers or businesses in the marketplace.

Caveat Emptor

“Let the buyer beware”; a principle that the purchaser must examine, judge, and test for herself.

Sale of Goods Act

A UK law enacted in 1979 which regulates the sale of goods that are bought and sold in the UK and the contractual rights and obligations of buyers and sellers.

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