Question

A provision under which the lender guarantees a quoted interest rate for a specific period of time. Also prohibits any repayment of principal during the time period.

A. Amortization
B. Interest-only
C. Balloon payment
D. Lock-in

Answer 1

A lock-in is a provision under which a lender guarantees a quoted interest rate for a specific period of time and prohibits any repayment of principal during that time.

Step-by-step explanation:

The provision described in the question is called a Lock-in. A lock-in is an arrangement between a borrower and a lender where the lender guarantees a quoted interest rate for a specific period of time. During this time period, the borrower is prohibited from repaying any principal on the loan.