Use the Below Payoff Table with Four Mortgage Options to Answer

question 23

Multiple Choice

Use the below payoff table with four mortgage options to answer the following question(s) .
-What is the best payoff rate for the 3-year ARM?

• A)$53,405
• B)$64,547
• C)$44,897
• D)$49,564

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Definitions:

Convertible

A type of security, such as a bond or preferred stock, that can be converted into a specified number of shares of common stock.

Credits

In accounting, credits refer to an entry on the right-hand side of an account ledger, representing an increase in liability, equity accounts, or revenue, or a decrease in an asset or expense account.

Conversion

The act of changing one form of securities into another, such as converting bonds into shares of stock, or the process of changing one currency into another.

Trading Securities

Financial securities that are purchased and held primarily for sale in the near term to generate income on short-term price differences.