Which of the Following Is an Advantage of Home Ownership

question 97

Multiple Choice

Which of the following is an advantage of home ownership?

• A) Home ownership is a good way to control the costs of utilities, maintenance, and insurance.
• B) Mortgage interest and real estate taxes are tax deductible.
• C) Money invested in a house is a highly liquid investment.
• D) Home ownership provides a guaranteed rate of return that is more stable than the return earned by investing in the stock market.

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Definitions:

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.

Compounded Quarterly

The method of calculating interest where the interest is added to the principal sum four times a year.

Compounded Annually

A method of calculating interest where the interest earned over a year is added to the principal, and the sum becomes the principal for the next year.

Future Value

The value of an investment or loan at a specific date in the future, calculated using the current value and the expected rate of growth or interest.