12. Which of the following statements about variable rate mortgages are TRUE? A. Variable rate mortgages are popular for individuals who are risk-adverse. B. Borrowers have the advantage of lower interest costs when mortgage rates stay flat or decline. C. Variable rate mortgages allow lenders to better match assets and liabilities, reducing interest rate risk. D. For variable rate mortgages, interest rate changes are reflected in one or more changes to the amortization period, the repayment schedule, or the outstanding balance. (1) All of the above (2) Only A, B, and C (3) Only A, C, and D (4) Only B, C, and D 13. Which of the following statements about graduated payment mortgages is TRUE? A. GPM payments are constant over the initial term of the mortgage. B. Early payments on a GPM are typically lower than payments on a constant blended rate repayment loan. C. In a GPM, the total indebtedness of the borrower often continues to grow until the gradually increasing periodic payments become large enough to pay all interest charged in a payment period and make some contribution to debt repayment. D. GPMs represent a high degree of capital risk unless extremely large loan-to-value ratios are used. (1) All of the above (2) Only A and B (3) Only B and C (4) Only A and D