Finance
A Wyoming borrower obtains an ARM with an initial rate of 5% and caps of 2% per adjustment and 6% lifetime. The maximum rate this borrower could ever pay is:
A7%
B9%
C11%✓ Correct
D13%
Explanation
With a starting rate of 5% and a lifetime cap of 6%, the maximum rate is 5% + 6% = 11%. The periodic cap limits how much the rate can change per adjustment period, while the lifetime cap limits the total increase over the life of the loan.
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