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Fixed Income Q68

0. A mortgage starts out with a fixed rate and then becomes an adjustable rate after a specified initial term. The mortgage is most likely a:

  • Option : C
  • Explanation : When the mortgage starts out with a fixed rate and then becomes an adjustable rate after a specified initial term, the mortgage is referred to as a hybrid mortgage. If the mortgage rate is fixed for some initial period and is then adjusted to a new fixed rate, the mortgage is referred to as a rollover or renegotiable mortgage.
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