Which of the Following Clauses Leads to Higher Risk for an ARMs

question 28

Multiple Choice

Which of the following clauses leads to higher risk for an ARMs lender?

• A)Negative amortization is not allowed when interest is not covered by the payment due to a payment cap
• B)There is a floor for payments.
• C)Adjustment interval is longer than one year
• D)All of the above

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Definitions:

Behavioral Tendencies

The habitual patterns or ways in which individuals tend to act or behave based on their personality or experiences.

Cerebral Cortex

The outer layer of the brain involved in higher-level brain functions such as thought, memory, and decision-making.

Evolutionary Psychology

A theoretical approach in psychology that explores how evolutionary principles, such as natural selection, shape human behavior and mental processes.

Reproductive Success

The passing of genes onto the next generation in a way that they can also pass those genes to a subsequent generation.