Based on the Rising Housing Prices of 2000-2005, Many Buyers

question 57

Multiple Choice

Based on the rising housing prices of 2000-2005, many buyers opted for interest-only loans and variable rate mortgages with little or no down payment because

• A) they expected short-term interest rates to fall substantially in the future and this would reduce their monthly mortgage payment in the years ahead.
• B) variable rate mortgages are a good way to reduce the risk accompanying your investment when you plan to stay in the house for a long time.
• C) they thought housing prices would continue to rise and therefore they would be able to sell the house for a profit within a couple of years.
• D) they could easily recoup their investment, even if there was a downturn in housing prices in the future.

Understand the impact of leader and follower qualities on LMX development.

Analyze the benefits and drawbacks of high-quality LMX relationships for subordinates.

Appreciate the prescriptive nature of leadership making as outlined in LMX theory.

Understand the rules and limitations associated with the student loan interest deduction.

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Definitions:

Central Route

A method of persuasion that involves careful and thoughtful consideration of the arguments presented, leading to lasting attitude change.

Persuasion

The act of convincing someone to do or believe something through reasoning or the use of another method.

Financial Investment

An allocation of resources, typically money, into assets or endeavors expected to generate financial returns or growth over time.

Elaboration Likelihood Model

Theory identifying two ways to persuade: a central route and a peripheral route.