With an Index Rate of 8

question 11

Multiple Choice

With an index rate of 8.5%,a 200 basis point margin and a life of loan cap of 5%,a fully indexed rate on an ARM is:

• A) 6.5%
• B) 17%
• C) 10.5%
• D) 13.5%

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Definitions:

Book Value

The net asset value of a company calculated as total assets minus intangible assets and liabilities.

Net Income

The residual income a company has after expenses and taxes are deducted from its total income.

Comprehensive Income

The change in equity of a company during a period from transactions and other events, including all non-owner changes.

Sales

The total revenue a company generates from selling goods or services within a specific period.