Why Do We Have ARMs?
解释了可调利率抵押贷款借款人承担低效风险的悖论，指出在现实合同中，风险分担与还款时间路径不可分割，借款人为了获得更有利的还款时间安排而接受利率风险。
This paper suggests a resolution to the paradox of inefficient risk bearing by adjustable‐rate mortgage (ARM) borrowers. The analysis shows that when contracts are written in a realistic way, with payments linked across time via a common loan‐rate function, risk sharing and the tilt of the mortgage payment stream become inextricably linked. Unless time preferences are identical or the cost of funds exhibits no time trend, borrowers will accept interest‐rate risk in order to gain a more favorable time path of mortgage payments.