Use the Information Given Below to Answer the Following Questions)

question 19

Multiple Choice

Use the information given below to answer the following questions) . 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 5-year ARM?

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

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Definitions:

Health Psychology

Any application of psychological methods and theories to understand the origins of disease, individual responses to disease, and the dimensions and determinants of good health.

Tertiary Prevention

A type of prevention practised after suffering or disability from the disease is being experienced, with the goal of preventing further deterioration. See also primary prevention and secondary prevention.

Public Health Approach

An approach to community psychology characterized by the following steps: (1) identifying a disease and developing a reliable diagnostic method (descriptive epidemiology); (2) developing a theory of the disease’s course of development on the basis of laboratory and epidemiological research (analytic epidemiology); and (3) developing and evaluating a disease prevention program (experimental epidemiology). The thrust of the approach is to reduce environmental stressors while enhancing people’s capacities to withstand those stressors.

Diagnosis

In the realm of medicine and abnormal psychology, a determination or identification of the nature of a person’s disease or condition, or a statement of that finding. A diagnosis is made on the basis of a diagnostic system.