Finance
In Michigan, a fully indexed rate on an ARM equals:
AThe index rate only
BThe index rate plus the lender's margin✓ Correct
CThe initial teaser rate
DThe maximum cap rate
Explanation
The fully indexed rate = Index rate + Margin. The margin is the lender's profit spread added to the index. For example, if the index is 3% and the margin is 2.5%, the fully indexed rate is 5.5%.
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