CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

The balloon risk is ______.

A. accompanied by a fully-amortizing loan
B. a type of contraction risk
C. the risk that the loan may extend in maturity
Correct Answer: C

A balloon payment is a type of loan that does not fully amortize over its term. It is a type of extension risk.

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