The Hybrid ARM Attempts to Balance the Fixed Payment Desire

question 25

Multiple Choice

The hybrid ARM attempts to balance the fixed payment desire of a borrower with the lender's desire to increase interest rates if market rates rise in the future.In its most common
Form,known as a 2-28,the hybrid ARM will have a fixed-interest rate for:

• A)1 year
• B)2 years
• C)26 years
• D)28 years

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Definitions:

Monetary Damages

Financial compensation awarded to an individual for loss or injury as a result of the violation of a legal right.

Injunction

A legal order issued by a court that compels a party to do or refrain from specific acts.

Judicial Proceeding

A formal process before a court of law involving the adjudication of legal claims or disputes.

Contract

An agreement that can be enforced in court; formed by two or more parties, each of whom agrees to perform or to refrain from performing some act now or in the future.