MCKISSOCK CHAPTER 10 40 HOUR TRAINING 2024 QUESTIONS AND ANSWERS
monetary policy implementation - Answer-Influencing short-term interest rates to affect the availability and cost of credit in the economy and, ultimately the economic decisions businesses and households make. ALSO know as D-O-R-M.
...
MCKISSOCK CHAPTER 10 40 HOUR
TRAINING 2024 QUESTIONS AND
ANSWERS
monetary policy implementation - Answer-Influencing short-term interest rates to affect
the availability and cost of credit in the economy and, ultimately the economic decisions
businesses and households make. ALSO know as D-O-R-M.
An example of Moral Suasion... - Answer-How the exchange rate has a growing
influence between countries when it comes to the value of the U.S. dollar. The Fed is
highly involved in monetary issues with our main trading partners to stabilize the dollar
in other marketplaces, and making our products viable in other countries
What does D-O-R-M stands for in the monetary implement policy? - Answer--
(DISCOUNT RATES): Are federal discount rate the interest rates charge by the Federal
Reserve Banks on loans to member commercial banks.
-(OPEN MARKET OPERATION): Fed sells or buys government securities (bonds) as
means of controlling the supply & demand of money
-(RESERVE REQUIREMENTS): are the percentage of deposits commerical banks are
required to keep on deposit, either on hand at the bank or in the bank's own accounts.
-(MORAL SUASION): is using persuasive influence on the public and financial markets
so they perceive credit in a specific way.
Fed Funds Rate - Answer-Affect the short-term interest rate banks charge when
borrowing money in the Fed funds market. For Example: usually very short-term loans
for a day or two to help banks cover reserve requirements caused by the normal to hit
its target Fed funds rate.
How can the demand present for the subject and competing investments be observed
by? - Answer-Through the:
-Survey of investors
-Liquidity of other investments
-Stabilized occupancy of the subject and like investment properties
-Predicatble changes in market conditions
What are the two vehicles the source of capital can be related? - Answer-1. debt
2. equity
_________ is the portion of an investment that is borrowed from another source. -
Answer-Debt
What is Common Sources of Debt? - Answer-Mortgages from various sources
, Equity - Answer-Is the funds (cash) the investor puts into an investment.
What are some Common Sources of Equity? - Answer-- Cash from various sources
- (REIT) Real Estate Investment Trusts
- Partnerships
- syndications
- Joint ventures
- Pension funds
- Insurance companies
How do debt investors generate their earnings from real estate investments? - Answer-
Debt investors (conservatives) generate their earnings from the interest they receive on
the principle of the loans.
What does (FOMC) stands for and mean? - Answer-Federal Open Market Committee:
who meets regularly to discuss the present and future state of the economy including
where interest rates should ideally be to accomplish the Fed's long-term objectives of
economic growth and stability with minimal inflation.
Underwriting Standards - Answer-The criteria that an underwriter uses when
determining if a borrower or property can qualify for a loan.
Conforming Loan - Answer-A loan that DO meet the lending limits of the secondary
market's underwriting guidelines or private investor. and all the other criteria established
by Fannie Mae or Freddie Mac. This is considered as a LOW RISK for investors.
nonconforming loan - Answer-Have one or more underwriting indicators that fall outside
the acceptable range of guidelines. They are considered HIGHER RISK for the
originating lender. For Instance: Any loan that DOES NOT meet the Fannie
Mae/Freddie Mac loan requirements are classified as nonconforming loans.
Mortgage - Answer-is a pledge of real property in which the borrower, called
"Mortgagor", pledges her property to the lender, called "Mortgagee"
Amortization - Answer-is when the principal and interest of a loan is repaid in
installments.
Government Loans - Answer-is one which is insured or guaranteed by the federal
government. Such as:
-FHA (Federal Housing Administration): are loans insured by the federal government
through the department of (HUD) Housing and Urban Development that actually insures
the loans.
-VA (Veterans Administration): guaranteed by the federal government loan program to
help veterans' housing needs.
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