Q: Which of the following is FALSE regarding ARM loans?

A) Lenders only originate ARMs if the expected benefit from shifting interest rate risk is greater than the increased risk of borrower default caused by adjusting composite rates

B) ARMs with more frequent adjustments to the composite rate are more risky to lenders than ARMs with less frequent adjustments

C) ARMs with shorter term index means increased risk to borrower because shorter term index rates have more volatility

D) none of the answer choices is FALSE