Using the rule of thumb used by lenders (each point charged raises the yield by 1/8 of 1%), 4 discount points raise the effective yield of a typical home loan by
A) 1/32 of 1%.
B) 2/8 of 1%.
C) 1/4of 1%.
D) 1/2 of 1%.

Name: Using the rule of thumb used by lenders (each point charged raises the yield by 1/8 of 1%), 4 discount points raise the effective yield of a typical home loan by A) 1/32 of 1%. B) 2/8 of 1%. C) 1/4of 1%. D) 1/2 of 1%.
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Question

Quizplus · Accepted Answer

4 × 1/8 = 1/2

Using the Rule of Thumb Used by Lenders (Each Point