17. Which of the following statements are TRUE? A. Under CHIP, home owners can receive up to 55% of the value of their home with the specific amount to be based on the home owner's age, the location of the property, the type of home, and the home's current appraised value. B. Since reverse mortgages are rising debt loans, it is important that seniors' children or estate also understand the process involved in a reverse mortgage because an inheritance can be substantially reduced upon repayment of the debt. C. The PLAM scheme presents great risk to borrowers, with a large and possibly unwarranted assumption that borrower' income will increase with inflation. D. In a zero inflationary environment, the nominal payment and "real" payment on a standard constant payment mortgage will be the same. (1) Only A, B, and C (2) Only B and D (3) Only A, C, and D (4) All of the above 18. An institutional lender is offering a shared appreciation mortgage (SAM) to a home owner. The borrower wants to obtain a $275,000 mortgage loan. The interest rate on the mortgage is set at 7.5% per annum, compounded monthly, and payable with monthly payments over a 25-year amortization. In addition, the lender will receive 20% of any increase in property value. The participation is to be payable whenever the property is sold or, if the property is not sold within 6 years, then the property is deemed to be sold after 6 years. The lender agrees to grant the mortgage against the property, which has a current market value of $350,000 (and both lender and borrower agree to this amount). If the market value at the end of 6 years is $475,000, calculate the expected yield that the lender will earn on this investment, expressed as an annual rate, compounded monthly. (1) 7.500000% (2) 8.710548% (3) 6.790432% (4) 9.962234%