INSTRUCTIONS: Choose the Word or Phrase in [ ] Which

question 122

Multiple Choice

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Seeking mortgage preapproval [is | is not] recommended when you begin your house search.

• A)for the first item
• B)for the second item
• C)if neither item will correctly complete the

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Definitions:

Effective Rate

is the interest rate on a loan or financial product, restated from the nominal rate as an annual rate that may incorporate compounding.

Endowment Fund

A financial endowment given to institutions like universities, museums, and non-profits to invest and use the annual income from investments for operations or programs.

Perpetuity

A financial instrument that pays a steady, never-ending stream of cash flows to the investor.

Compounded Semi-Annually

A method where interest is added to the principal balance of an investment or loan twice a year, leading to compound growth.