7. Negative amortization reduces the principal balance of a loan. 8. The floor of an ARM is the maximum reduction of payments or interest rates allowed. 9. ARMs eliminate all the lender's interest rate risk. 10.The default risk of a FRM is higher than the default risk of an ARM. 11.Inflation makes very little difference to lenders of and investors needing money. 12.Lenders and investors worry about default, interest rate, marketability, and liquidity risks. 13.Determining a loan balance on a Constant Payment Mortgage (CPM) is a simple future value of an annuity