1) What is the major benefit of balloon mortgages for the borrower within the commercial loan industry?

Balloon Mortgages have taxation advantages when compared to other forms of mortgages.

Balloon Mortgages offer lower interest rates than other mortgages.

Balloon Mortgages have a structure that benefits real estate developers especially.

Balloon Mortgages do not have to be fully repaid.

2) The present value of a loan is equivalent to the sum of future payments associated with this loan.

True

False

3) Empirical data confirms that the risk premium for commercial mortgages is sensitive to economic uncertainty. Risk premiums increased above their equilibrium level during the big recession.

True

False