Based on your understanding of the concept of a lockout provision, lenders are able to reduce their exposure to which of the following risks through its use?

Question

Quizplus · Accepted Answer

A lockout provision prevents borrowers from repaying a loan before a specified period, thus reducing the lender's reinvestment risk, which is the risk of having to reinvest proceeds at a lower interest rate if the loan is repaid early.

Based on Your Understanding of the Concept of a Lockout