BANKING & FINANCE - April 1, 1992

Key ARM Rate Drops: The 11th District cost of funds index, the measurement most widely used in setting adjustable-rate mortgages in California, fell again in February to 5.800% from 6.002% in January. Homeowners with ARMs tied to the index typically pay an interest rate set from 2 to 2.5 percentage points higher than the index. The index, compiled by the Federal Home Loan Bank of San Francisco, measures the costs of money for thrifts in California, Nevada and Arizona. The rate has been sliding as overall interest rates have declined.