Chapter 13, Consuming Activity

1.  A mortgage whose periodic payments are only sufficient to cover the interest due. The loan is paid
    off at maturity with a single payment called a balloon payment.
     A. Interest only Mortgage              B. Partially amortizing mortgage
     C. Graduated payment mortgage   D. Adjustable rate mortgage

2.  A mortgage payment scheme with periodic payments structured to include interest plus some
     principal reduction that is insufficient to fully amortize the loan when due. The balance remaining
     at maturity is paid off with a balloon payment.
      A. Interest only Mortgage              B. Partially amortizing mortgage
      C. Graduated payment mortgage   D. Adjustable rate mortgage
3.  A variable rate or payment mortgage that periodically adjusts to a specified index.
      A. Interest only Mortgage              B. Partially amortizing mortgage
      C. Graduated payment mortgage   D. Adjustable rate mortgage
4.  Origination Fee is that loan charges designed to cover the lender's costs of processing the
     application and loan.
      A. T
      B. F
5.  Points is that loan charges designed to boost the lender's effective rate of return. Also known as
     discount points.
      A. T
      B. F
6.  Annual percentage rate is that the lender's true yield once points and other fees are considered. It is
     the lenders IRR assuming the borrower holds 
       A. T
       B. F
7.  Commensurability is that when making a choice between options, if for any given option, a
     weakness in some characteristics can be compensated for by strengths in other characteristics, the
     characteristics are said to exhibit commensurability
      A. T
      B. F
8.  Reverse annuity mortgage is a mortgage product designed to meet the needs of elderly
     homeowners by providing an annuity or line of credit secured by a mortgage to be paid off when
     the house is sold or refinanced or the estate probated.
       A. T
       B. F

Answer A. B. D. A. A. A. A. A.