When Housing Prices Fell During 2007, the Mortgage Default Rate

question 159

Multiple Choice

When housing prices fell during 2007, the mortgage default rate

• A) declined as well.
• B) responded in a similar manner as during other recent recessions.
• C) increased substantially.
• D) changed very little.

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Definitions:

Times Interest Earned Ratio

A financial metric that measures a company's ability to meet its interest obligations from its operating income.

Bonds Payable

Long-term liabilities representing money owed by a company to bondholders, to be repaid at a future date.

Tax Rate

The percentage at which an individual or corporation is taxed.

Installment Note Payable

A liability that represents a loan that is repaid in regular payments over a set period of time.