Which of the Following Is Most Descriptive of the Primary

question 6

Multiple Choice

Which of the following is most descriptive of the primary market?

• A) The loan origination market
• B) Trading in second mortgages
• C) The buying and selling of mortgage loans
• D) The market created by Fannie Mae and Freddie Mac

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Definitions:

Dividend Yield

A financial ratio that shows how much a company pays out in dividends each year relative to its stock price, often used by investors to gauge the income-generating ability of a stock.

Capital Gains Yield

The increase in the price of an investment or asset, expressed as a percentage of the initial purchase price.

Total Rate of Return

The comprehensive yield on an investment over a specific period, considering both capital gains and dividends or interest, expressed as a percentage of the initial investment.

Dividend Growth Model

A valuation method that estimates the price of a company’s stock based on the dividend per share and the dividend growth rate.