Describe the Major Tools and Criteria for Decision Making -What Is the Worst Payoff Rate for the 5-Year ARM

question 16

Multiple Choice

Describe the major tools and criteria for decision making. Use the information below to answer the following question(s) . Below is a payoff table that lists four mortgage options: $$\begin{array} { | l | l | l | l | } \hline &{ \text { Outcome } } \\\hline \text { Decision } & \text { Rates Rise } & \text { Rates Stable } & \text { Rates Fall } \\\hline \text { 1-year ARM } & \$ 66,645 & \$ 43,650 & \$ 38,560 \\\hline \text { 3-year ARM } & \$ 62,857 & \$ 47,698 & \$ 42,726 \\\hline \text { 5-year ARM } & \$ 55,895 & \$ 50,894 & \$ 48,134 \\\hline \text { 30-year fixed } & \$ 52,276 & \$ 52,276 & \$ 52,276 \\\hline\end{array}$$
-What is the worst payoff rate for the 5-year ARM?

• A) $ 50,894
• B) $ 48,134
• C) $ 51,641
• D) $ 55,895

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