Borrowers promise to repay borrowed funds By reducing their

Borrowers promise to repay borrowed funds By reducing their costs relative to the revenues. By borrowing additional funds in the future Based on their expectations of having higher incomes in the futu By selling other assets Question 12 (1.66 points) An ge loan is likely to be a (an)

Solution

1. Borrowers promise to repay borrowed funds based on the expectations of getting higher future income. Funds borrowed in the present to increase current consumption or expenditure and reduce it in future or recover the loan via higher income in the future.

the correct option is 3

2. A mortgage loan is likely to be a long-term debt instrument that is paid for a year or more. A mortgage loan is against a residential property which means if a person fails to pay back the loan amount then the mortgage is seized and sold to recover the amount.

the correct option is 3

3. Most liquid funds are those funds which can easily be converted into cash. Hence among the given funds money market mutual funds are considered liquid as investors can sell their shares at any time.

the correct option is 2

4. financial markets of channel funds indirectly between buyers and sellers.

the correct option is 1