If You Have an Interest Rate Subsidy from a Home

question 10

Multiple Choice

If you have an interest rate subsidy from a home builder or real estate developer, you have a

• A) Payment cap.
• B) Buy-down.
• C) ARM.
• D) Rate cap.
• E) Interest-only mortgage.

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Definitions:

U.S. Treasury Department

A federal government department responsible for managing government revenue, issuing currency, and supervising national banks.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Interest Rate

The cost of borrowing money, expressed as a percentage of the amount borrowed, or the return earned on invested funds.

Money Supply

The aggregate monetary assets within an economy at a certain instant, including cash, coins, and the money in checking and savings accounts.