1.Which of the following is NOT an example of financial leverage?

A.Obtaining a mortgage to purchase a house

B.Buying 100 shares of a stock using cash

C.Using a "no interest till 2010" offer to buy a TV

D.Buying 100 shares of a stock on margin

2.Which of the following is the CORRECT definition of a jumbo loan?

A.A loan to build houses that are larger than average

B.A loan whose amount exceeds the guidelines of agencies like Fannie Mae

C.A loan whose term is longer than 30 years

D.A loan with additional points charged to cover closing costs

3.Briefly discuss some of the advantages and disadvantages associated with an adjustable-rate mortgage loan?