A.If a lender is to repossess or bring about the sale of a property if the borro

Question

A.If a lender is to repossess or bring about the sale of a property if the borrower defaults on the mortgage loan, the lender is said to have a ___ in the real estate.

Freehold interest

Lease interest

Bankruptcy interest

Secured interest

B.

Mr. Smith has allowed Mrs. Jones to run a sewer line through Mr. Smith’s backyard so that Mrs. Jones has access to the city sewer system. This is an example of a(n):

Title assurance

Easement

Estate for years

Encumberance

C.

Which of the following variables is not needed to solve a discounting problem:

Discount curve

Period of time

Future value

Interest rate

Freehold interest

Lease interest

Bankruptcy interest

Secured interest

B.

Explanation / Answer

Solution

A. Secured interest - As the lender has mortagage property incase if borrower defaults. As it is taken as security and it is a secured asset.

B. Easement

C. Discount Curve A discounting problem need Future value,Interest rate and Period of time.

The formula is Present Value = Future value/(1+i)n

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