When Current Mortgage Rates Fall Sufficiently Low That the Present

question 55

Multiple Choice

When current mortgage rates fall sufficiently low that the present value savings of refinancing outweigh the cost of prepayment penalties (and other fees and costs) , the mortgage holders are said to have a valuable:

• A)put option
• B)call option
• C)forward agreement
• D)futures contract

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Definitions:

Multiple Sclerosis

A chronic autoimmune disease affecting the central nervous system, characterized by damage to the myelin sheath that covers nerve fibers, leading to a range of symptoms.

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A type of cancer that forms in the lining of the stomach, leading to symptoms like stomach pain, nausea, and weight loss.

Blood Vessel Inflammation

A condition also known as vasculitis, involving the swelling and irritation of the blood vessels, which can restrict blood flow and lead to various health problems.

Chronic Stress

A continuous state of emotional pressure and distress occurring over a prolonged period, capable of affecting an individual’s physical and mental health.