If the Maximum Loan-To-Value Ratio That a Lender Will Accept

question 38

Multiple Choice

If the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 90 percent,then the borrower must make

• A) a minimum down payment of $10,000 plus closing costs.
• B) a minimum down payment including closing costs of $10,000.
• C) closing costs plus points of $10,000.
• D) a maximum down payment of $10,000.
• E) none of these.

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Definitions:

Income Offer Curve

A graphical representation depicting how an individual's optimal bundle of goods changes as their income changes, keeping prices constant.

Utility Function

A mathematical representation of an individual's preference ordering over a set of goods or outcomes.

Income

The financial gain earned or received by an individual or entity, usually through work, investments, or business operations.

Nuts

Hard-shelled seeds of certain plants that are edible and often rich in nutrients such as fats, proteins, and carbohydrates.