Finance
An adjustable-rate mortgage (ARM) in Alaska has an initial rate of 4% and caps at 2% per year. If rates rise, the maximum rate increase in one year is:
A2%✓ Correct
B4%
C6%
D8%
Explanation
A 2% annual cap means the interest rate can rise no more than 2 percentage points in any given adjustment period, regardless of how much market rates increase.
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