An Adjustable Rate Mortgage Is Offered with an Initial Interest

question 24

Multiple Choice

An adjustable rate mortgage is offered with an initial interest rate of 7.00%. The index is currently yielding 5.50%, and the margin is 200 basis points. What is the size of the "teaser"?

• A) There is no teaser.
• B) 50 basis points.
• C) 150 basis points.
• D) 350 basis points.

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Definitions:

Pathology

The examination of illnesses, their origins, progression, manifestations, and outcomes.

Olfactory Organ

The part of the body's anatomy responsible for detecting smells, primarily the nose and its related structures.

Sense

A faculty by which the body perceives an external stimulus, such as sight, sound, touch, taste, or smell.

Smell

A sensation or perception of odors or scents detected by the olfactory nerves in the nose, contributing to taste and the detection of hazards.