Fixed Income Q69
0. Which of the following statements about convertible mortgages is most accurate?
- A
The mortgage rate is initially a fixed rate. At some point, the borrower has the option to convert into an adjustable rate for the remainder of the mortgage’s life.
- B
The mortgage rate is initially an adjustable rate. At some point, the borrower has the option to convert into a fixed rate for the remainder of the mortgage’s life.
- C
The mortgage rate is initially either a fixed rate or an adjustable rate. At some point, the borrower has the option to convert into a fixed rate or an adjustable rate for the remainder of the mortgage’s life.
- Option : C
- Explanation : In a convertible mortgage, the mortgage rate is initially either a fixed rate or an adjustable rate. At some point, the borrower has the option to convert into a fixed rate or an adjustable rate for the remainder of the mortgage’s life.
