Valuation and Financing Practice Question
Question
A broker is supervising a transaction file involving adjustable-rate loans. The parties need a practical answer before moving forward. Which answer best applies the rule? (Item 51)
Answer choices
- A. It is primarily a tax rule with no effect on brokerage practice.
- B. It removes the need for written disclosure if the licensee believes the client already knows.
- C. Recognize index, margin, adjustment period, and caps.
- D. It can be ignored if the transaction is expected to close quickly.
Correct Answer
C. Recognize index, margin, adjustment period, and caps.
Explanation
The correct answer is C because adjustable-rate loans requires candidates to recognize index, margin, adjustment period, and caps. The other options overstate the effect of custom, oral agreement, escrow, or independent salesperson action and do not reflect safe California exam practice.
Question details
- Difficulty: easy
- Domain: Valuation and Financing
- Objective: adjustable-rate loans