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Question
Which of the following is NOT characteristic of the real estate portfolio for most banks?
A. Commercial real estate mortgages have been the fastest growing component of real estate loans.
B. Adjustable rate mortgages have rates that are periodically adjusted to some index.
C. Borrowers prefer fixed-rate loans to ARMs during periods of high interest rates.
D. Residential mortgages are the largest component of the real estate loan portfolio.
E. The proportion of ARMs to fixed-rate mortgages can vary considerably over the rate cycle.
Answer
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