Use the Information Given Below to Answer the Following Question(s)

question 39

Multiple Choice

Use the information given below to answer the following question(s) . Below is a payoff table that lists three mortgage options: $$\begin{array} { | l | l | l | l | } \hline & { \text { Outcome } } \\\hline \text { Decision } & \text { Rates Rise } & \text { Rates Stable } & \text { Rates Fall } \\\hline \text { 2-year ARM } & \$ 66,645 & \$ 43,650 & \$ 38,560 \\\hline \text { 5-year ARM } & \$ 62,857 & \$ 47,698 & \$ 42,726 \\\hline \text { 25-year fixed } & \$ 52,276 & \$ 52,276 & \$ 52,276 \\\hline\end{array}$$
-What is the maximum opportunity loss incurred for the 25-year fixed decision?

• A) $ 8,626
• B) $ 13,716
• C) $ 14,369
• D) $ 10,581

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Definitions:

Collectivism

A social and economic ideology that emphasizes the priority of group goals over individual goals and the importance of cohesion within social groups.

High-context Cultures

Cultures where communication is highly reliant on contextual cues such as body language, status, and tone of voice, rather than explicit words.

Cultural Differences

Variations in the customs, values, norms, and social practices among people from different backgrounds or societies.

Cultural Differences

Variations in the practices, beliefs, and values of different societies, which can affect communication, work styles, and business practices in a global context.