The Longer the Time Between Rate Adjustments on an Adjustable

question 26

Multiple Choice

The longer the time between rate adjustments on an adjustable rate mortgage:

• A) the less risk assumed by the lender
• B) the less probability of prepayment
• C) the more risk assumed by the lender
• D) the greater the fluctuation in the rate on the loan

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Definitions:

Machine-Hours

A measure of production activity that quantifies the number of hours machines are operated in the manufacturing process.

Mark Up

The percentage added to the cost price of goods to cover overhead and profit.

Direct Labor-Hours

This refers to the total number of hours worked by employees who are directly involved in the production of goods or services.

Machine-Hours

A measure of production activity that quantifies the total hours machines are operated in the manufacturing process.