Discuss the meaning of LETTER C and L the associated numerical value in the context of the problem. What overall conclusions and/or predictions can you make from the results presented here?

 

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FIGURE 16.5 Rolling Back the Mortgage-Selection Decision Tree 0.6 D Rates Rise $(61,134) S(61,134) A 0.3 E 1. Year ARM Rates Stable GS(54,629.40) $(46,443) B $(46,443) 0.1 F Rates Fall $(40,161) $(40,161) C 0.6 Rates Rise $(56,901) $(56,901) 0.3 3 Year ARM Rates Stable HS(54,135.20) K S(54,135.20) $(51,075) $(51.075) T 0.1 Ratos Fall 30-Year Fixed $(46,721) $(46,721) 0.6 M Rates Rise $(54,658) $(54,658) L 0.3 Rates Stable $(54,658) N $(54,658.00) $(54,658) 0.10 Rates Fall $(54,658) $(54,658) 8 FIGURE 16.5 Rolling Back the Mortgage-Selection Decision Tree 0.6 D Rates Rise $(61,134) S(61,134) A 0.3 E 1. Year ARM Rates Stable GS(54,629.40) $(46,443) B $(46,443) 0.1 F Rates Fall $(40,161) $(40,161) C 0.6 Rates Rise $(56,901) $(56,901) 0.3 3 Year ARM Rates Stable HS(54,135.20) K S(54,135.20) $(51,075) $(51.075) T 0.1 Ratos Fall 30-Year Fixed $(46,721) $(46,721) 0.6 M Rates Rise $(54,658) $(54,658) L 0.3 Rates Stable $(54,658) N $(54,658.00) $(54,658) 0.10 Rates Fall $(54,658) $(54,658) 8