Multiple Choice
Suppose that a mortgage bank "locked in" an interest rate for a prospective borrower at 8.5%. However, prior to the loan closing, the market mortgage rate falls to 7.5 %. In this scenario, the mortgage banker would be most concerned with which of the following risks?
A) Prepayment risk.
B) Fallout risk.
C) Default risk.
D) Liquidity risk.
Correct Answer:
Verified
Correct Answer:
Verified
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