Mortgage Originators Often Offer Many Types and Forms of Available

question 8

Multiple Choice

Mortgage originators often offer many types and forms of available residential loans as part of their mortgage menu. However, the predominant form of prime conventional mortgage remains the:

• A) (fixed-rate) level payment mortgage (LPM)
• B) adjustable rate mortgage (ARM)
• C) subprime mortgage
• D) alt-A mortgage

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Definitions:

Variable Expenses

Costs that change in proportion to the activity or volume of a business operation.

Contribution Margin

The difference between sales revenue and variable costs; used to cover fixed costs and generate profit.

Break-Even Point

The sales level at which the company does not make a profit or incur a loss, denoting a balance between revenue and costs.

Variable Manufacturing Costs

These costs vary directly with the level of production output and include expenses such as raw materials, direct labor, and certain overheads.