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    Interest Problem - Suppose market interest rates are expected to rise.

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    Suppose market interest rates are expected to rise. Would a potential borrower find a fixed rate mortgage or a variable rate mortgage more attractive? Why?

    © BrainMass Inc. brainmass.com June 3, 2020, 8:40 pm ad1c9bdddf
    https://brainmass.com/business/interest-rates/interest-problem-suppose-market-interest-rates-are-expected-to-rise-148193

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    Potential borrower will find a fixed rate mortgage more attractive because this will protect him in the rising interest rates. He will have to pay the fixed rate even in the future the interest rate increases. Thus this will protect himself ...

    Solution Summary

    The solution discusses if the potential borrower would find a fixed rate mortgage or variable rate mortgage more attractive.

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