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Your broker calls to offer you the investment opportunity of a lifetime the chance to invest in mortgage backed securities. The broker explains that these
Your broker calls to offer you the investment opportunity of a lifetime the chance to invest in mortgage backed securities. The broker explains that these securities are entitled to the principal and interest payment received from a pool of residential mortgages. List some of the questions you would ask your broker that would help in accessing this risk of this investment opportunity.
broker calls to offer you the investment opportunity of a lifetime, the chance to invest in mortgage-backed securities The broker explains that these securities a of residential mortgages List some of the questions you would ask your broker that would help in assessing the risk of this investment opportunity stions you would ask include (Select the best choice below.) A. Real estate location (after all the three most important determinants of real estate price are location, location location) B. What percentage of borrowers are behind on their mortgage payments? C. Type of real estate (commercial properties offer less liquidity if the market turns sour, because empty homes can be rented for revenue) D. Will borrowers soon be experiencing an interest rate increase because they took out a mortgage with a low initial rate that was adjustable after a period of tim E. Creditworthiness of borrowers (how likely is it that borrowers will lose their job and be unable to make payments on a timely basis?) F. Precedence in bankruptcy (would other lenders have a senior claim to properties in bankruptcy?) G. Percentage of properties in the region that are under water (homeowners owe more than they borrowed) or in foreclosure H. Quality of real estate (is it in a good condition or would there need to be repairs prior to sale?) 1. All of the above Step by Step Solution
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