The Purpose of a Rate Cap with a Variable Rate

question 98

Multiple Choice

The purpose of a rate cap with a variable rate mortgage is to

• A)minimize interest costs.
• B)prevent changes in the amount of the monthly payment.
• C)increase negative amortization.
• D)restrict the amount by which the interest rate can increase.
• E)lower the escrow account.

---

Definitions:

Müllerian Mimicry

A form of biological mimicry where two or more harmful species, that are not closely related, evolve to look similar, which reinforces the avoidance behavior in predators.

Defenseless Species

Species that lack physical defenses or behavioral strategies to effectively protect themselves from predators.

Dangerous Species

Species that pose a threat to human health or safety, either through direct aggression, toxicity, or disease transmission.

Keystone Species

A species that plays a crucial role in maintaining the structure of an ecological community, affecting many other organisms in an ecosystem.