Which of the Following Is True When the Yield Curve

question 30

Multiple Choice

Which of the following is true when the yield curve is steeply rising:

• A) ARM interest rates will be about the same as FRM interest rates.
• B) Borrowers can "lock in" the low short-term interest rates by taking out an ARM.
• C) If you borrow using an ARM, your interest rates are more likely to rise than fall in the future.
• D) FRM interest rates will be lower than ARM rates, due to the Federal Reserve Board's efforts to stimulate the economy by reducing interest rates.

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Definitions:

Biological Predisposition

An innate tendency or vulnerability to develop certain conditions, often based on genetic factors.

Panic Attack

A sudden episode of intense fear or discomfort, characterized by various physical symptoms, such as palpitations, sweating, and feelings of losing control or impending doom.

Obsessive-Compulsive Behaviour

A pattern of unreasonable thoughts and fears (obsessions) that lead to repetitive behaviors (compulsions), often recognized as a type of anxiety disorder.

Phobic Disorder

A type of anxiety disorder characterized by an excessive and irrational fear of an object, situation, or activity.