Some Commercial Mortgages Have Adjustable, or Floating, Interest Rates

question 22

Multiple Choice

Some commercial mortgages have adjustable, or floating, interest rates. The index rate to which the contract rate is tied is typically which of the following for commercial mortgages?

• A) The yield on a constant maturity Treasury security of the same term
• B) The cost of funds index (COFI)
• C) The London Interbank Offer Rate (LIBOR)
• D) The interest rate on a comparable maturity level-payment mortgage

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