A Self-Employed Borrower Who Has Documentable Assets but Is Not

question 13

Multiple Choice

A self-employed borrower who has documentable assets but is not able to provide adequate documentation for his income may be eligible for this type of loan:

• A)FNMA
• B)FHLMC
• C)Conforming
• D)Alt-A

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Definitions:

Debt/Equity Ratio

A gauge for comparing the mix of a company's funding through shareholders' equity versus debt, frequently applied to understand the company's use of financial leverage.

Retained Earnings

Retained earnings represent the portion of net income left after dividends have been paid to shareholders, which is then reinvested in the business.

Static Theory

A concept in economic theory that assumes conditions remain constant over time.

Capital Structure

The mix of debt and equity financing that a company uses to fund its operations and growth.