Question

If a one-year adjustable-rate mortgage loan (ARM) is originally offered at 7% interest with "caps of 1 and 6," the interest rate cannot go above 8% at the first adjustment and no matter how hight the chosen index might rise, can never go above 11%. True/ False?

Answer 1

This will be false

Step-by-step explanation:

Base on the scenario been described in the question, it is false because the rate can go above 8% at the first adjustment and according to how high the chosen index might rise, it can also go above 11% which is stated that it cannot, so it is false.