Which of the following is FALSE regarding ARM loans?○ Lenders only originate ARMs if the expected benefit from shifting interest rate risk is greater than theincreased risk of borrower default caused by adjusting composite ratesnone of the answer choices is FALSEARMs with shorter term index means increased risk to borrower because shorter term index rates have morevolatilityARMs with more frequent adjustments to the composite rate are more risky to lenders than ARMs with lessfrequent adjustments

Several statements have been made about ARM. We have to find the one that is FALSE.

Answered: Which of the following is FALSE…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 6Q

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