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Interest rates are expected to fall over the short and medium term. From a bank...

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Finance

Interest rates are expected to fall over the short and medium term. From a bank lenderss point of view, the best mortgage product to promote to customers that maximises returns is an interest-only loan, which is evenly split between a variable and fixed interest rate.

Critically evaluate this statement as correct or incorrect. (6 marks)

What would you recommend to lenders to maximise their return? (4 marks)

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