A Loan in Which the Lender Receives a Share of the Increase

question 9

Multiple Choice

A loan in which the lender receives a share of the increase in value of the property in return for a reduction in the initial rate of interest,is called a(n) :

• A) adjustable rate mortgage
• B) graduated payment mortgage
• C) buy down mortgage
• D) shared appreciation mortgage

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Definitions:

Bond Indenture

A legal contract between a bond issuer and bondholders detailing the characteristics of the bond, such as its maturity date, coupon rate, and payment schedule.

Bond Issuer

An entity, such as a corporation or government, that creates and sells bonds to finance its projects and operations.

Fiscal Year

A one-year period used for financial reporting and budgeting purposes, which does not necessarily align with the calendar year.

Semiannual Interest

Interest that's computed and disbursed semi-annually, commonly associated with bonds and loans.