Ch 5 Assessment Saved Help Save & Exit Submit 12 10 points 02:52:14 Skipped A borrower has been analyzing different adjustable rate mortgage (ARM) alternatives for the purchase of a property. The borrower anticipates owning the property for five years. The lender first offers a $147,000,30-year fully amortizing ARM with the following terms: Initial interest rate =6 percent Index =1-year Treasuries. Payments reset each year Margin =2 percent Interest rate cap = None Payment cap = None Negative amortization = Not allowed Discount points =2 percent Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year ( BOM 2=7 percent; (BOY) 3=8.5 percent; (BOY) 4=9.5 percent; (BOY) 5=11 percent. Required