Question
A 30-year 1/1 ARM has an initial rate of 1.5%. In the future the rate will reset to 250 basis points above the LIBOR index
A 30-year 1/1 ARM has an initial rate of 1.5%. In the future the rate will reset to 250 basis points above the LIBOR index with no rate caps or floors. At the first reset, the LIBOR is 4%. What is the fully indexed rate at the first reset?
| 4%
| ||
| 5.5%
| ||
| 6.5%
| ||
| 8.5%
|
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Cost Benefit Analysis
Authors: Harry F. Campbell, Richard P.C. Brown
3rd Edition
1032320753, 9781032320755
