Finance
An interest rate cap on an ARM loan limits:
AThe maximum loan amount
BHow much the interest rate can increase per adjustment period and over the loan's lifetime✓ Correct
CThe number of times the rate can be adjusted
DThe minimum interest rate on the loan
Explanation
ARM rate caps protect borrowers by limiting how much the interest rate can increase in any single adjustment period (periodic cap) and over the life of the loan (lifetime cap).
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