By purchasing a fixed-rate 30-year mortgage,inflation risk:
A)is eradicated.
B)is spread equally to the borrower and lender.
C)is passed from the lender to the borrower.
D)is passed from the borrower to the lender.
E)none of the above

Question

Quizplus · Accepted Answer

In a fixed-rate mortgage, the borrower pays the same interest rate throughout the loan term, regardless of inflation changes. If inflation rises, the real value of the payments decreases, benefiting the borrower and passing the inflation risk to the lender.

By Purchasing a Fixed-Rate 30-Year Mortgage,inflation Risk