CFA CFA Level 1 CFA Level 1 Question of the Week – Fixed Income (mortgage)

CFA Level 1 Question of the Week – Fixed Income (mortgage)

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    • Avatar of Matt_AnalystPrepMatt_AnalystPrep
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        The correct answer is B.

        A mortgage that starts out with a fixed rate and converted to a fixed rate later is referred to as a rollover or renegotiable mortgage. These are often used in Canada, Germany, Denmark, etc.

        If the mortgage starts at a fixed rate and is later converted into an adjustable rate mortgage, then we would say this is a hybrid mortgage.

        A convertible mortgage is an adjustable-rate loan that gives the borrower the option to convert the loan to a fixed-rate mortgage.

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        Thank you for the detailed and detailed answer. I think that everyone intuitively guessed which answer was correct. It is worth adding more complex tasks to think about the answer. I have recently been very interested in real estate and mortgages.

        Arnold voted up
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