Mortgage Brokers Often Did Not Make a Strong Effort to Evaluate

question 9

Multiple Choice

Mortgage brokers often did not make a strong effort to evaluate whether the borrower could pay off the loan. This created a

• A) severe adverse selection problem.
• B) decline in mortgage applications.
• C) call to deregulate the industry.
• D) decrease in the demand for houses.

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Definitions:

Working Capital Financing

Short-term loans or other credit products used by companies to finance their daily operations and manage short-term liquidity.

Long-Term Debt

A financial obligation due for repayment in more than one year's time.

Cash Conversion Cycle

A metric that shows the number of days it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Average Inventory

An accounting metric that estimates the value or quantity of inventory over a period to assess company efficiency.