If rates in the market fall between now and one month from now,the mortgage banker:
A) loses as the mortgages are sold at a discount.
B) gains as the mortgages are sold at a discount.
C) loses as the mortgages are sold at a premium.
D) gains as the mortgages are sold at a premium.
E) neither gains nor loses.

Question

Quizplus · Accepted Answer

If market rates fall, existing mortgages with higher rates become more valuable, allowing the mortgage banker to sell them at a premium, thus gaining.

If Rates in the Market Fall Between Now and One