12-15.The Following Statement(s)is True

question 30

Multiple Choice

12-15.The following statement(s) is true:

• A) the ability-to-pay theory of default states that a borrower may default when he or she is financially unable to meet the monthly payment
• B) the equity theory of default states that borrowers default when there is no positive equity in the property
• C) the ability-to-pay theory of default and the equity theory of default are in conflict with each other.
• D) a and b

---

Definitions:

Normally Distributed

Describes a distribution that follows a bell curve, where data is symmetrically distributed with most values clustering around a central point.

Normally Distributed

Describes a statistical distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence.

Mean

The average value of a set of numbers, indicating the central point of a data distribution.

Standard Normal

A normal distribution with a mean of zero and a standard deviation of one, used as the basis for z-scores in statistics.