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1. (a) Discuss the notion of pipeline risk in residential mortgage markets. (2) Suppose that tomorrow to the surprise of the market the Fed uses

1. (a) Discuss the notion of pipeline risk" in residential mortgage markets. (2) Suppose that tomorrow to the surprise of the market the Fed uses monetary policies to raise market interest rates substantially. What would most likely happen to the implied going-in capitalization rate and the market value of the property? Why?

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