General Mortgage KnowledgeQuestion 131 of 400
An ARM's index is 4.75% and the margin is 3.00%. What is the fully indexed rate before applying any caps?
a.4.75%
b.3.00%
c.7.75%
d.6.75%
Explanation
Fully indexed rate = 4.75% + 3.00% = 7.75%. The index and margin alone are not the rate, and 6.75% adds them incorrectly.
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