Use the Information Given Below to Answer the Following Question(s)

question 39

Multiple Choice

Use the information given below to answer the following question(s) . Below is a payoff table that lists three mortgage options: $$\begin{array} { | l | l | l | l | } \hline & { \text { Outcome } } \\\hline \text { Decision } & \text { Rates Rise } & \text { Rates Stable } & \text { Rates Fall } \\\hline \text { 2-year ARM } & \$ 66,645 & \$ 43,650 & \$ 38,560 \\\hline \text { 5-year ARM } & \$ 62,857 & \$ 47,698 & \$ 42,726 \\\hline \text { 25-year fixed } & \$ 52,276 & \$ 52,276 & \$ 52,276 \\\hline\end{array}$$
-What is the maximum opportunity loss incurred for the 25-year fixed decision?

• A) $ 8,626
• B) $ 13,716
• C) $ 14,369
• D) $ 10,581

---

Definitions:

Impulsivity

The inclination to make decisions impulsively, showing conduct that lacks careful thought, contemplation, or regard for potential outcomes.

Ventral Striatum

A component of the brain's reward system that plays a significant role in motivation, pleasure, and reinforcement learning.

Amygdala

A part of the brain's limbic system, significantly involved in emotion regulation, emotional learning, and the formation of memories related to emotional events.

Neurotransmitters

Chemicals that carry signals over the gap between synapses in the brain.