Which of the Following Is TRUE Concerning Wraparound Loans

question 17

Multiple Choice

Which of the following is TRUE concerning Wraparound Loans?

• A) The borrower makes payments on existing loan
• B) The lender makes payments on existing loan
• C) The lender only makes payments on the second mortgage
• D) The borrower only makes payments on the second mortgage

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Definitions:

Cost-effectiveness Evaluations

The process of assessing the economic efficiency of different alternatives in order to see which option achieves the desired result most economically.

Dollar Terms

A financial expression that quantifies the cost, value, or price of something in terms of currency.

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated as net profit divided by the cost of the investment.

Benefit-cost Ratio

A financial ratio used to assess the economic value of an investment, comparing the benefits received from the investment to the costs associated with it.