Question
A 30 year 1/1 ARM has an initial rate of 7.85%. In the future the rate will reset to 225 basis points above the LIBOR
A 30 year 1/1 ARM has an initial rate of 7.85%. In the future the rate will reset to 225 basis points above the LIBOR index with no rate caps or floors. In 1 year, at the time of the first reset, the LIBOR is 1%. What will be the fully indexed rate at the first reset?
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Financial Management For Public, Health, And Not-for-Profit Organizations
Authors: Steven A. Finkler, Daniel L. Smith, Thad D. Calabrese, Robert M. Purtell
6th Edition
150639681X, 978-1506396811
