If Rates in the Market Fall Between Now and One

question 32

Multiple Choice

If rates in the market fall between now and one month from now,the mortgage banker:

• A) loses as the mortgages are sold at a discount.
• B) gains as the mortgages are sold at a discount.
• C) loses as the mortgages are sold at a premium.
• D) gains as the mortgages are sold at a premium.
• E) neither gains nor loses.

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Definitions:

Decision-Making

The process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.

Line Item

A specific and distinct item that appears on a statement or list, such as a financial report, indicating a single transaction or account component.

Financial Position

A snapshot of the assets, liabilities, and equity of a company at a particular point in time, providing insight into its financial health.

Associates Profit

The share of earnings derived from an associate company in which the parent company has significant influence but not total control.