question. 1. Capped Adjustable Rate Mortgages normally limit interest rate increases in the monthly payment but not loan balances calculations when negative amortization is permitted: a. True b. False 2. A cap of 2-5 with an Adjustable Rate Mortgage means: a. The rate can change by 3 percent per year b. The loan balance will increase by 3 percent overall c. The monthly payment can increase by a maximum amount of 2 percent per year but not more than 5 percent overall d. The monthly payment can increase by a maximum amount of 5 percent per year but the loan balance must increase by 2 percent every year the loan is outstanding 3. A free to float loan has no cap provisions. Negative amortization is still a possibility. a. True b. False 4. The term External depreciation refers to the following situation: a. Normal wear and tear of the structure (building) b. The need to install windows and an upgraded electrical system c. A flat roof on a building d. Problems associated with the property's location 5. Non-Repairable Physical Depreciation refers to: a. Structural obsolesce that takes place over time b. Carpeting, Paint and Use damage that occurs to a property c. The interior layout of the property d. All of the above 6. The Site Value when doing a Replacement Decision problem is calculated using: a. The original cost of the land b. The historical cost of land in the area per square foot c. The market value of the land per square or front foot