If you decide to buy a house with an adjustable-rate mortgage (ARM),you are:
A)exposing yourself to inflation risk.
B)reducing your inflation risk.
C)passing inflation risk to the lender.
D)taking on some of the lender's inflation risk.
E)a and d

Question

Quizplus · Accepted Answer

An adjustable-rate mortgage (ARM) is a type of mortgage where the interest rate is adjusted periodically based on market conditions. This exposes the borrower to inflation risk, as their mortgage payments could increase if interest rates rise. Therefore, choosing an ARM is not the best option if you are looking to reduce your inflation risk.

If You Decide to Buy a House with an Adjustable-Rate