From the Perspective of the Lending Financial Institution, Interest Rate

question 32

Multiple Choice

From the perspective of the lending financial institution, interest rate risk is

• A)lower on a 30-year fixed-rate mortgage than on a 15-year fixed-rate mortgage.
• B)lower on a 15-year fixed-rate mortgage than on a 30-year fixed-rate mortgage.
• C)higher on a 15-year fixed-rate mortgage than on a 30-year fixed-rate mortgage.
• D)higher on a 15-year adjustable-rate mortgage than on a 30-year adjustable-rate mortgage.

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Definitions:

Lease Period

refers to the duration of time for which a lease agreement is valid, granting the lessee the right to use the leased asset.

Factory Space

A commercial building or area designed and zoned for manufacturing, assembly, and industrial production activities.

Landowner

An individual or entity that holds legal title to land or property.

Fee Simple

A legal term referring to the most complete ownership of land or property by an individual, which includes the rights to use, sell, or inherit the property.