The Initial Rate on an ARM Will Typically Be

question 78

Multiple Choice

The initial rate on an ARM will typically be

• A) relatively low, which benefits the homeowner.
• B) relatively high to allow the bank to recoup costs.
• C) about the same as a fixed rate loan on the same maturity.
• D) set by state law.

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Definitions:

Leading Indicators

Economic factors that change before the economy starts to follow a particular pattern or trend, used to predict future economic movements.

Lagging Indicators

Economic factors that change after the economy has already begun to follow a particular trend, used to confirm the trend.

Balanced Scorecard

A strategic planning and management system that organizations use to communicate what they are trying to accomplish, align day-to-day work with strategy, and measure and monitor progress toward strategic targets.

Research And Development

Activities undertaken by a company to innovate and introduce new products or improve existing products or processes.