Over the life of the loan, which of the following would consistently have a Highest principal balance prior to maturity, given each loan had the same term, principle, and interest rate today? a. CAM b. CPM c. GPM d. Can not be determined without specific information.

Which of the following is a true statement about ARM? a. ARM is designed to help elder, house-rich and cash-poor borrowers. b. ARM is designed to solve the so-called title effect problem for some borrowers. c. ARM payments are subject to changing interest rate. d. ARM is less risky for the borrower because the initial interest rate is lower.