Interest Rates Quiz

1. What factor has the most direct impact on your mortgage interest rate?

Your credit score The weather Your employer's size The home's square footage

2. When inflation rises, what typically happens to interest rates?

They decrease They stay the same They increase They become negative

3. What is the Federal Reserve's primary tool for influencing interest rates?

Setting mortgage rates directly Open market operations and federal funds rate Printing more money Changing tax rates

4. What does APR stand for?

Annual Percentage Rate American Payment Rate Average Principal Remaining Asset Protection Ratio

5. How does a higher credit score typically affect your mortgage interest rate?

It increases the rate It has no effect It lowers the rate It doubles the rate

6. What is a discount point?

A fee for paying early An upfront fee to lower your interest rate A late payment fee An appraisal fee

7. What happens to bond prices when interest rates rise?

Bond prices rise Bond prices fall Bond prices stay the same Bonds become worthless

8. What is the relationship between mortgage rates and the 10-year Treasury yield?

They are completely unrelated Mortgage rates typically track Treasury yields Treasury yields track mortgage rates They move in opposite directions

9. What is a rate lock?

A guarantee that your interest rate will not change during a specified period A requirement to pay your rate immediately A penalty for changing your rate A type of adjustable rate

10. What is the primary disadvantage of an adjustable-rate mortgage (ARM)?

Higher initial rates Payment uncertainty due to rate adjustments No down payment required Higher credit requirements

Quiz Results