BANKING & FINANCE - May 30, 1992

Key ARM Indicator Drops: The 11th District cost of funds index, one of the most widely used indexes for setting adjustable-rate mortgages, fell to 5.427% in April, down from 5.611% in March. The rate, which continues to set record lows as overall interest rates have fallen, is a measurement of the cost of funds for savings institutions in California, Nevada and Arizona as compiled by the Federal Home Loan Bank of San Francisco. Lenders generally set rates for ARMs at 2 to 2.5 percentage points above the index.