A homeowner can refinance the mortgage loan on the house at a lower rate when the interest rates go down.The right to refinance at a lower rate is a(n):

Question

Quizplus · Accepted Answer

The right to refinance at a lower rate is similar to a call option, which gives the holder the right to buy a stock at a specific price. Refinancing at a lower rate allows the homeowner to "buy" their mortgage at a lower rate, which is similar to buying a stock at a lower price. Therefore, the correct option would be B) call option.

A Homeowner Can Refinance the Mortgage Loan on the House