______1. When doing a Refinancing problem the timing (n) of the new loan is:

a. The loan balance plus real estate taxes and flood insurance added

b. The original loan amount for a newly selected time period

c. .Equal to the remaining time of the original loan

d. None of the above

_____2. The Refinance accept decision is basically:

a. MC greater than MB

b. MC less than MB

c. MB₁greater than MB₂

d. MB₁is less than MB₂

_{____________}3. The change in the loan balance amount, when doing a refinance decision problem, is calculated because:

a. The monthly payment amounts are different

b. Loans with lower interest rates amortize more slowly

c. Loans with higher interest rates amortize more slowly

d. All of the above answers are correct

_____4. The cost of refinancing a loan include fees paid to the lender and points paid on the loan:

a. Trueb. False

_____5. A Graduated Payment Mortgage (GPM) that graduates 5 times stabilizes its monthly payment in year(s) _____ given loan terms or 9%, 30 years.

a. 5 -30

b. 6-30

c. 30

d.all of the above answers

_____6. A GPM has a:

a. variable interest rate

b. inflation adjusted interest rate through time

c. fixed interest rate

d. step-up interest rate

_____7. A GPM is primarily of interest to mortgage applicants that expect _____ income in the future:

a. Rising

b. Falling

c. Remain stable

d. None of the above answers

_____8. Negative amortization with a GPM occurs during:

a. Later years of the loan only

b. middle years of the loan only

c. early years of the loan only

d. All of the above answers

_____9. When calculating the annual amortization table for a GPM the following factor is used:

a. PVIF

b. PVIFA

c. FVIF

d. FVIFA

_____10. When comparing Option 1: First Mortgage only to Option 2 the combination of a 1^stand 2^ndmortgages, the decision rule for acceptance of the combo option (option 2) is:

a. MC₁is less than MB₂

b. MC₁is greater than MB₂

c. MC₁is less than MC₂

d. MC₁is greater than MC₂