To Encourage Borrowers to Accept Adjustable Rate Mortgages (ARMs) Rather

question 33

Multiple Choice

To encourage borrowers to accept adjustable rate mortgages (ARMs) rather than level-payment mortgages, mortgage originators generally offer an initial short-term introductory rate that is less than the prevailing market mortgage rate. This rate is referred to as a(n) :

• A) margin rate
• B) teaser rate
• C) index rate
• D) discount rate

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Definitions:

Reducing Discrimination

Implementing measures and practices aimed at decreasing unfair treatment of individuals based on their race, gender, age, or other characteristics.

Advisory Committees

Groups of experts or stakeholders formed to offer guidance and advice on specific topics or issues to organizations or governing bodies.

Quotas

Set limits or targets, often referring to the required or expected production output, sales levels, or representation of certain groups.

Cultural Value Dimension

Frameworks or models that describe the dominant patterns of values, beliefs, and behaviors that characterize different cultures.