Which of the Following Is True of a Non-Recourse Mortgage

question 2

Multiple Choice

Which of the following is true of a non-recourse mortgage?

• A) The house buyer, if unable to make payments, can lose all possessions
• B) The house buyer has an American style put option on the house
• C) The house buyer has a European style put option on the house
• D) The lender is less likely to lose money on the mortgage

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Definitions:

Real Minimum Wage

The lowest legal hourly wage, adjusted for inflation, that employers can pay their workers.

Purchasing Power

The ability of an individual or group to buy goods and services with a given unit of currency or resources.

Real Wages

Wages adjusted for inflation, reflecting the actual purchasing power of income earned from work.

Two-Income Families

Households in which both partners earn wages or salaries contributing to the family's total income.