QUESTIONS 19 THROUGH 32 RELATE TO QUANTITATIVE METHODS

30- - MOCK AND SAMPLE EXAMS CFA CFA LEVEL I MOCK EXAM AFTERNOON 2013
MOCK AND SAMPLE EXAMS CFA CFA LEVEL I MOCK EXAM AFTERNOON 2013
30-year 3/5 adjustable-rate mortgage (ARM) 3.750% 3 The rate on the ARM resets at the end of Year 3. Assuming the ARM is reset at 5.500% (i.e., the remaining balance on the loan will now be repaid with 5.500% nominal annual interest), which of the three loans will have the smallest monthly payment after the rate reset at the end of Year 3? A. 30-year ARM B. 15-year fixed-rate loan C. 30-year fixed-rate loan