Margin on an adjustable rate mortgage is the percentage point a lender adds to the index rate to determine the rate of interest. It is important for home buyers to understand all of the following…

The correct answer is D. Marginal rate of return. See the full explanation below for the reasoning.

Investment Management

Question

Margin on an adjustable rate mortgage is the percentage point a lender adds to the index rate to determine the rate of interest. It is important for home buyers to understand all of the following basic features of an ARM Except:

Options

AAdjustment period
BIndex rate
CPayment caps
DMarginal rate of return

How the community answered

(25 responses)

A
8% (2)
B
4% (1)
C
16% (4)
D
72% (18)

Topics

#adjustable rate mortgage#ARM features#index rate#payment caps

Community Discussion

No community discussion yet for this question.

Full CTFA Practice