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above
commonly contained within
collateralized debt obligations. An institution that originates and holds a
a. True fixed-rate mortgage is adversely
b. False affected by ____ interest rates; the
borrower who was provided the
A.True mortgage is adversely affected by ____
interest rates.
Federally insured mortgages guarantee a. stable; decreasing
a. loan repayment to the lending b. increasing; stable
financial institution. c. increasing; decreasing
b. that the interest rate will not increase d. decreasing; increasing
during the life of the mortgage.
c. the lending financial institution a c. increasing; decreasing
selling price for the mortgage in the
secondary market. Rates for adjustable-rate mortgages are
d. all of the above commonly tied to the
a. average prime rate over the previous
a. loan repayment to the lending year.
financial institution. b. Feds discount rate over the previous
year.
At a given point in time, the interest rate c. average Treasury bill rate over the
offered on a new fixed-rate mortgage is previous year.
typically ____ the initial interest rate d. average Treasury bond rate over the
offered on a new adjustable-rate previous year.
mortgage.
a. below c. average Treasury bill rate over the
b. above previous year.
c. equal to
d. all of the above are very common
Caps on mortgage rate fluctuations with b. lower on a 15-year fixed-rate
adjustable-rate mortgages (ARMs) are mortgage than on a 30-year fixed-rate
typically mortgage.
a. 2 percent per year and 5 percent for
the mortgage lifetime. Mortgage companies specialize in
b. 5 percent per year and 15 percent for a. purchasing mortgages originated by
the mortgage lifetime. other financial institutions.
c. 0 percent per year and 10 percent for b. investing and maintaining mortgages
the mortgage lifetime. that they create.
d. 3 percent per year and 8 percent for c. originating mortgages and selling
the mortgage lifetime. those mortgages.
d. borrowing money through the creation
a. 2 percent per year and 5 percent of mortgages that is used to invest in
for the mortgage lifetime. real estate.
a. True b. True
a. 1,014; 750