Finance
The 'discount rate' set by the Federal Reserve affects real estate because:
AA. It directly sets the mortgage interest rate for all home loans
BB. Changes in the discount rate influence broader interest rates including mortgage rates✓ Correct
CC. The discount rate sets the capitalization rate for commercial property
DD. It determines the maximum loan amount under FHA guidelines
Explanation
The Federal Reserve's discount rate (rate charged to banks for borrowing) influences overall interest rates. While it doesn't directly set mortgage rates, changes ripple through financial markets, affecting the prime rate, Treasury yields, and ultimately mortgage rates.
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