2-True/False Questions (17 marks) 1. ARMs were developed because lenders were tired of offering a limited selection of loan alternatives to borrowers. 2. ARMs help lenders combat unanticipated inflation changes, interest rate changes, and a maturity gap. 3. Characteristics of a PLAM include an increasing mortgage payment and an adjusting loan balance tied to an index. 4. A major benefit of a PLAM is the mortgage payment increases closely following borrower salary increases. 5. PLAMs have been very popular with lenders. 6. Lender's can partially avoid estimating interest rates by tying an ARM to an interest rate index. 7. Negative amortization reduces the principal balance of a loan