Question
Question 18 Which of the following statement(s) is/are true? (Select the correct answer from the options below the statements) (1) A mortgage is a form of long term loan that is secured on an asset.typically land and property (2) A mortgage is a form of equity and is attached to non-current assets, typically land and property (3) A mortgage may be for a long period: 20 years or more (1) and (3) (1) only (1) and (2) (2) and (3) 4 pts
Answer
4.5
(296 Votes)
Prudence
Elite · Tutor for 8 years
Answer
(1) and (3)
Explanation
## Step1:The first step involves individually ascertaining the validity of each of the statements provided. To achieve this, we'll need to tap into our knowledge of financial concepts such as mortgages and equity.## Step2:Statement (1) asserts that a mortgage is a long-term loan that is secured on an asset like land or property. This is indeed an accurate description of a mortgage and is hence, valid.## Step3:Statement (2) suggests that a mortgage represents a form of equity attached to non-current assets such as land or property. However, this statement is inaccurate for the fact that mortgages are forms of debt rather than equity.## Step4:Statement (3) dictates that a mortgage can be a form of long-term commitment, lasting up to 20 or more years. This statement is correct as mortgages can indeed last on average from 15-30 years.## Step5:Now, by looking at the multiplicity of statements offered, it's clear that the correct answer will include statement (1) and statement (3).