Which of the Following Statements Regarding the Break-Even Point for Paying

question 98

Multiple Choice

Which of the following statements regarding the break-even point for paying discount points in order to get a lower interest rate on the loan is correct?

• A) All else equal, the break-even point for paying points on an original mortgage is longer than the break-even point for paying points on a refinance.
• B) All else equal, the break-even point for paying points on an original mortgage is longer for a taxpayer who does not make extra principal payments each year on the loan than for a taxpayer who does make additional principal payments each year on the loan.
• C) All else equal, the break-even point for a taxpayer paying points on an original mortgage is longer when the taxpayer's marginal income tax rate increases in the years subsequent to the original financing compared to a taxpayer whose marginal tax rate does not change in the years subsequent to the year in which the loan is executed.
• D) None of these statements are correct.

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Definitions:

Sexual Abuse

Any form of non-consensual sexual contact or behavior imposed upon an individual, causing harm or distress.

Perpetrator

An individual who commits a harmful, illegal, or immoral act, often used in the context of crime and abuse.

Mandated Reporters

Individuals required by law to report any suspected cases of abuse or neglect to proper authorities.

Child Abuse

Any action by another individual – adult or child – that causes significant harm to a child, including physical, emotional, sexual abuse, or neglect.