As Short-Term Interest Rates Began to Rise in 2005, Which

question 328

Multiple Choice

As short-term interest rates began to rise in 2005, which one of the following mortgage loan categories experienced the largest increase in default and foreclosure rates?

• A) fixed rate mortgages to prime borrowers
• B) fixed rate mortgages to sub-prime borrowers
• C) adjustable rate mortgages extended to both prime and sub-prime borrowers
• D) adjustable rate mortgages to sub-prime borrowers only; the default and foreclosure rates of these loans extended to prime borrowers declined

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Definitions:

Disjunctive Proposition

A statement formed by joining two assertions with the connector "or," indicating that at least one of the assertions is true.

Categorical Proposition

A type of logical statement connecting a subject and a predicate, generally structured in the form of "All S are P", "Some S are P", "No S are P", or "Some S are not P".

Hypothetical Proposition

A statement that expresses a conditional relationship between two ideas or events, often formed as an "if-then" statement.

Hypothetical Syllogism

A logical argument consisting of two conditional statements and a conclusion, based on the assumption that if the premises are true, the conclusion must follow.