A Borrower Is Offered a Choice Between a Fixed Rate

question 62

Multiple Choice

A borrower is offered a choice between a fixed rate mortgage and a variable rate mortgage.The fixed rate mortgage may be more attractive if the borrower expects:

• A)Inflation to decrease
• B)Inflation to increase
• C)The home price to increase
• D)The home price to decrease

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Definitions:

Withdrawals

Amounts of money taken out from a business by its owner(s) for personal use.

Provision

An amount set aside in the accounts of a company to cover a future liability or decrease in the value of an asset.

Accounts Receivable

Liabilities of customers to a firm for provisions or merchandise that have been delivered but payment is outstanding.

Capital Balance

The amount recorded in a shareholder's or partner's equity account, reflecting their investment in the business.