Which of the Following Is the Principal Risk Faced by a Home

question 59

Multiple Choice

Which of the following is the principal risk faced by a home equity lender?

• A)Interest rates in the economy may rise
• B)Interest rates in the economy may fall
• C)Home prices in the area may rise
• D)Home prices in the area may decline
• E)There is no risk associated with home equity lending.

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Definitions:

Market Mechanisms

The use of market principles and forces to allocate resources and determine prices within an economy.

Formal Lines

Predetermined channels of communication and authority within an organization, established through its structure and policies to ensure effective coordination and control.

Virtual Organization

A network of continually evolving independent organizations that share skills, costs, and access to one another’s markets.

Independent Companies

Businesses that operate on their own, without being owned or controlled by a larger corporation.