QUESTION 1

You would be more likely to borrow through an ARM if you believed that interest rates were going to increase.

True

False

QUESTION 2

The FHA guarantees mortgage loans to (mostly) lower income households.

True

False

QUESTION 3

A MBS security issued by FNMA would have a slightly lower yield than a government bond with the same average maturity.

True

False

QUESTION 4

Because of the uncertainty in future cash flows, ARM rates are generally higher than fixed-rate mortgage rates for the same maturity.

True

False

QUESTION 5

Your current income is an important component of your FICO score.

True

False