Which of the Following Are Disadvantages of PLAMs

question 22

Multiple Choice

Which of the following are disadvantages of PLAMs?

• A) Lenders face high levels of interest rate risk under PLAMs.
• B) Fewer homebuyers are likely to qualify for financing using PLAMs in comparison to CPMs.
• C) The price level used to index PLAMs is measured on an ex post basis and historic prices may not be an accurate reflection of future price.
• D) All of the above.

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Definitions:

Direct Manufacturing Cost

Expenses directly associated with the production of goods, including labor and materials.

Units Produced

The aggregate count of finished products produced over a designated time frame.

Direct Manufacturing Cost

Expenses directly associated with the production of goods, including raw materials and direct labor costs.

Units Produced

The total number of complete items manufactured during a specific period.