Which of the following descriptions most accurately reflects the risk position of an ARM lender in comparison to that of a FRM lender? Interest Rate Risk Default Risk
A) Higher Higher
B) Lower Lower
C) Higher Lower
D) Lower Higher
Correct Answer:
Verified
Q1: Q2: ARMs eliminate all the lender's interest rate Q5: PLAMs have been very popular with lenders. Q9: A borrower takes out a 30-year adjustable Q12: The default risk of a FRM is Q12: Which of the following statements regarding negative Q16: ARMs were developed because lenders were tired Q18: Under which scenario is negative amortization likely Q19: Lender's can partially avoid estimating interest rates Q20: A major benefit of a PLAM is
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