As Coupon Rates on New Mortgages Fall

Multiple Choice

As coupon rates on new mortgages fall:

A) individuals are inclined to sell off their mortgages
B) there is a decreased incentive for individuals in the pool to pay off old, high-cost mortgages and refinance at lower rates
C) there is an increased incentive for individuals in the pool to pay off old, high-cost mortgages and refinance at lower rates
D) there is no effect on mortgage payments