As Applied to Mortgage Loans, Which of the Following Statements

question 21

Multiple Choice

As applied to mortgage loans, which of the following statements is FALSE?

• A) Advertised rates are EARs.
• B) A spreadsheet uses the periodic interest rate, not the annual percentage rate.
• C) It is essential to know the compounding periods per year in order to use the TVM equations or determine the actual cost to rent money.
• D) A mortgage problem is very similar to a future value problem with an annuity.

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Definitions:

Consciously Activated

Processes or actions that are initiated or controlled by an individual's conscious awareness and deliberate thought.

Limited-Capacity Memory

A concept in cognitive psychology that suggests human memory has a finite capacity for storing and processing information.

Short-Term

Referring to a limited period of time, often contrasting with long-term or permanent scenarios.

Conscious Repetition

The intentional and repeated practice or review of information to aid memory retention.