Which of the Following Clauses Leads to Higher Risk for an ARMs

question 23

Multiple Choice

Which of the following clauses leads to higher risk for an ARMs lender?

• A) Negative amortization is not allowed when interest is not covered by the payment due to a payment cap
• B) There is floor for payments
• C) Adjustment interval is longer than one year
• D) All of the above

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Definitions:

Obsessive-compulsive Disorder

A mental disorder characterized by unwanted, recurring thoughts (obsessions) and repetitive behaviors (compulsions) that the individual feels driven to perform.

Alarm Signal

A warning sign or signal indicating imminent danger or the need to take action to avoid a threat.

Obsessive-compulsive Disorder (OCD)

A mental disorder characterized by recurrent, unwanted thoughts (obsessions) and/or repetitive behaviors (compulsions) that the individual feels driven to perform.

Rituals

Prescribed or established ceremonies that are often performed for religious, cultural, or social purposes, characterized by a series of formal actions.