Using the Rule of Thumb Used by Lenders (Each Point

question 40

Multiple Choice

Using the rule of thumb used by lenders (each point charged raises the yield by 1/8 of 1%) , 4 discount points raise the effective yield of a typical home loan by

• A) 1/32 of 1%.
• B) 2/8 of 1%.
• C) 1/4of 1%.
• D) 1/2 of 1%.

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Definitions:

Eurozone

The group of European Union countries that have adopted the euro as their official currency.

Common Currency

A currency that is used by several countries, facilitating the ease of trade and financial transactions between them.

Trade Liberalization

The process of reducing tariffs, quotas, and other barriers to allow for the free flow of goods between countries.