One Difference Between the Constant Amortizing Mortgage (CAM)and the Constant

question 14

True/False

One difference between the constant amortizing mortgage (CAM)and the constant payment mortgage (CPM)is the interest paid and loan amortization relationship.With a CAM,the loan amortization and interest paid are directly related and with the CPM the loan amortization and the interest paid are inversely related.

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Definitions:

Variance

A statistical measurement that represents the dispersion of a dataset relative to its mean, used to quantify the spread of data points.

Regression

A statistical method for estimating the relationships among variables, often used for prediction and forecasting in finance.

Correlation Coefficient

A statistical measure that calculates the strength of the relationship between two variables, ranging from -1 to 1, where 1 indicates a perfect positive correlation and -1 indicates a perfect negative correlation.

Standard Deviation

A statistical measure that represents the dispersion or variability of a data set or investment returns, indicating how much the values in the set deviate from the mean.