Question: answer Question 11 10 pts Use the below information to answer the following question(s). Below is a payoff table with three mortgage options: Outcome Probability

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Question 11 10 pts Use the below information to answer the following question(s). Below is a payoff table with three mortgage options: Outcome Probability 0.6 0.3 0.1 Decision Rates Rise Rates Stable Rates Fall 1-year ARM $66,645 $43,650 $38,560 3-year ARM $62,857 $47,698 $42,726 30-year fixed $52,276 $52,276 $52,276 What is the expected opportunity loss for the 1-year ARM? O $ 6,853.50 O $ 3,959.40 O $7,979.60 O $ 8,621.40

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