Which of the Following Is True When the Yield Curve

question 30

Multiple Choice

Which of the following is true when the yield curve is steeply rising:

• A) ARM interest rates will be about the same as FRM interest rates.
• B) Borrowers can "lock in" the low short-term interest rates by taking out an ARM.
• C) If you borrow using an ARM, your interest rates are more likely to rise than fall in the future.
• D) FRM interest rates will be lower than ARM rates, due to the Federal Reserve Board's efforts to stimulate the economy by reducing interest rates.

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