ARMs help lenders combat unanticipated inflation changes,interest rate changes,and a maturity gap.

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Adjustable rate mortgages (ARMs) have interest rates that adjust over time based on a specified index. This allows lenders to better manage their risk in the face of unexpected inflation or interest rate changes. Additionally, ARMs can help lenders manage a maturity gap, or a situation where a bank's assets mature at a different rate than its liabilities. Overall, ARMs can help lenders respond to changing market conditions and mitigate risk.

ARMs Help Lenders Combat Unanticipated Inflation Changes,interest Rate Changes,and a Maturity