Jerry Wants to Purchase a Flat

question 22

Multiple Choice

Jerry wants to purchase a flat. So he borrows $50,000 from XYZ bank. He signs a note for $50,000 and gives the bank a $50,000 mortgage on the flat as security for his repayment of loan. Within a year and a half, Jerry repays the entire loan. After the repayment of the loan, which of the following right does Jerry have against XYZ bank?

• A) Right of Foreclosure
• B) Right to Reimbursement
• C) Right of Subrogation
• D) Right of Redemption

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Definitions:

Cost of Equity

The return that investors require for investing in a company's equity, reflecting the risk of the investment.

Earnings Per Share

A metric used to determine a portion of a company's profit allocated to each outstanding share of common stock, calculated as net income divided by the number of shares.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often with fixed dividends.

Return on Investment

A measure of the profitability and efficiency of an investment, calculated by dividing the gain from the investment by its cost.