Use the Information Below to Answer the Following Questions) -What Is the Worst Payoff Rate for the 5-Year ARM

question 35

Multiple Choice

Use the information below to answer the following questions) . Below is a payoff table that lists four mortgage options: $$\begin{array} { | l | l | l | l | } \hline & { \text { Outcome } } \\\hline \text { Decision } & \text { Rates Rise } & \text { Rates Stable } & \text { Rates Fall } \\\hline \text { 1-year ARM } & \$ 66,645 & \$ 43,650 & \$ 38,560 \\\hline \text { 3-year ARM } & \$ 62,857 & \$ 47,698 & \$ 42,726 \\\hline \text { 5-year ARM } & \$ 55,895 & \$ 50,894 & \$ 48,134 \\\hline \text { 30-year fiXed } & \$ 52,276 & \$ 52,276 & \$ 52,276 \\\hline\end{array}$$
-What is the worst payoff rate for the 5-year ARM?

• A) $ 50,894
• B) $ 48,134
• C) $ 51,641
• D) $ 55,895

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Definitions:

Conversion

In law, the unauthorized act of possessing or controlling personal property belonging to another, effectively converting it to one's own use.

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An act, condition, or thing that interferes with the use or enjoyment of property or may be harmful or annoying to others.

Duress

A situation where a person is forced to act against their will or make a decision under pressure or threat, impacting the voluntariness of their actions.

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