How Does the Use of Adjustable-Rate Mortgages Affect Interest-Rate Risk

question 36

Multiple Choice

How does the use of adjustable-rate mortgages affect interest-rate risk?

• A) It reduces the interest-rate risk of lenders.
• B) It reduces the interest-rte risk of borrowers.
• C) It reduces the interest-rate risk of both lenders and borrowers.
• D) It increases the interest-rate risk of both lenders and borrowers.

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