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25 November, 15:15

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?

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  1. 25 November, 15:32
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    This will be false

    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.
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