If the Interest Rate on a Mortgage Changes with the Market

question 112

Multiple Choice

If the interest rate on a mortgage changes with the market interest rate, then the mortgage is:

• A) a 30-year fixed mortgage.
• B) a collateralized debt obligation.
• C) an adjustable-rate mortgage.
• D) a credit default swap.

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Definitions:

Guidelines

General rules, principles, or pieces of advice that suggest how something should be done or what something should be.

Account Category

The classification of accounts into different types, such as assets, liabilities, equity, revenue, and expenses, to organize financial information effectively.

Assets

Economic resources or valuable items owned by a business, capable of being converted into cash or used in generating revenue.

Liabilities

Financial obligations a company owes to outside parties, such as loans or accounts payable.