A Conforming Loan

question 5

Multiple Choice

A conforming loan:

• A)Exceeds the loan limits of loans that Fannie Mae and Freddie Mac can buy
• B)Meets loan limits of loans that Fannie Mae and Freddie Mac can buy
• C)Cannot be purchased by GSEs such as Fannie Mae and Freddie Mac
• D)Is another term for a fixed-rate mortgage loan

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Definitions:

Mark-up

A surplus included in the goods' purchase price to compensate for overhead costs and gain, determining the final sales price.

Cost

The cost involved in buying an item or the financial outlay needed to produce a good or service.

Mark-up

The amount added to the cost price of goods to cover overhead and profit, expressed as a percentage of the cost.

Markdown

A reduction from the original or listed price of a good or service, often used to stimulate sales or clear out inventory.