26-28 The ability to refinance a mortgage with no prepayment penalty gives the borrower a long-term put option on interest rates.

Name: 26-28 The ability to refinance a mortgage with no prepayment penalty gives the borrower a long-term put option on interest rates.
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Refinancing a mortgage with no prepayment penalty allows the borrower to take advantage of lower interest rates in the future, similar to having a put option on interest rates. Therefore, the statement is true.

26-28 the Ability to Refinance a Mortgage with No Prepayment