Which of the Below Statements Is TRUE

question 20

Multiple Choice

Which of the below statements is TRUE?

• A) The two primary quantitative underwriting standards are (1) the payment-to-income ratio (PTI), and (2) the loan-to-value ratio (LTV).
• B) The loan-to-value ratio (LTV) is the ratio of monthly payments to monthly income, which measures the ability of the applicant to make monthly payments (both mortgage and real estate tax payments).
• C) The lower the loan-to-value ratio (LTV), the greater the likelihood that the applicant will be able to meet the required payments.
• D) All of these

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Definitions:

Demand Curves

Graphical representations showing the relationship between the quantity of goods consumers are willing and able to purchase at various prices, typically downward sloping from left to right.

Own Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, holding all else constant.

Specific Tax

A tax that is levied as a fixed amount per unit of a good or service, rather than a percentage of the price.

Elasticity of Supply

A measure of how much the quantity supplied of a good responds to a change in the price of that good, indicating the flexibility of producers.