Which of the Following Is NOT Characteristic of the Real

question 113

Multiple Choice

Which of the following is NOT characteristic of the real estate portfolio for most banks?

• A)Commercial real estate mortgages have been the fastest growing component of real estate loans.
• B)Adjustable rate mortgages have rates that are periodically adjusted to some index.
• C)Borrowers prefer fixed-rate loans to ARMs during periods of high interest rates.
• D)Residential mortgages are the largest component of the real estate loan portfolio.

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Definitions:

Cash Basis

An accounting method where revenues and expenses are recognized only when cash is exchanged.

Financing Activities

Transactions involving raising capital or repaying funds to and from investors and creditors, as reflected in the cash flow statement.

Net Cash

The amount of cash that remains after deducting all operational, financial, and investment activities over a period.

Cash Basis

An accounting method where revenues and expenses are recorded when they are actually received or paid, not when they are incurred.