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Explain why you would be more or less willing to buy a house under the following...

Explain why you would be more or less willing to buy a house under the following circumstances:

a)You just inherited $100,000

b)Prices in the stock market become more volatile

c)You expect housing prices to fall

d)You expect Apple stock prices to fall over the next one year

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Answer #1

1. More likely to buy the house because of availability of funds [Not concerned with the opportunity cost]

2. Less willing to buy the house because stock market volatility might spillover to real estate prices

3. Less willing to buy the house because it is better to wait and buy after sometime at reduced prices.

4. If it is particular to Apple, I wont bother but if it spillsover to the enture stock market then that will be spilled over to real estate..Hence, less willing because prices might fall.

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