The Development of Fannie Mae and Freddie Mac Established the Framework

question 12

Multiple Choice

The development of Fannie Mae and Freddie Mac established the framework for a liquid secondary market for residential mortgages.In 2010,the share of all residential mortgage loans owned or securitized by Fannie Mae and Freddie Mac approached approximately:

• A)5%
• B)16%
• C)44%
• D)76%

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Definitions:

Borrowers

Individuals or entities that take out loans from financial institutions or other sources, committing to repay them over a specified period, often with interest.

Lenders

Individuals, organizations, or institutions that provide funds to borrowers under the agreement that the funds will be repaid with interest at a later date.

Fixed Incomes

Financial incomes that are set at a particular figure and do not fluctuate in the short term, such as bonds or pensions.

High Inflation

A period during which prices for goods and services rise excessively, eroding purchasing power.