Use the Below Payoff Table with Four Mortgage Options to Answer

question 67

Multiple Choice

Use the below payoff table with four mortgage options to answer the following question(s) .
-Which of the following decisions has the best average payoff?

• A)1-year ARM
• B)3-year ARM
• C)5-year ARM
• D)30-year fixed

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Definitions:

Bottom Line

The final net income or profit of a company as reported on the income statement, after subtracting all expenses from revenues.

Due Diligence

A comprehensive appraisal of a business or individual prior to signing a contract, particularly in terms of evaluating financial performance and obligations.

Potential Acquirer

An entity, typically a company or individual, considered likely or able to purchase or take over another business.

Structure and Definition

The organization and explanation of the components that make up a concept, system, or entity, detailing how they interrelate.