My lender has presented me with the option to pursue a $2/6,7/1$ ARM that has an amortization period of $30$ Years, an initial rate of $2\mathrm{.}875\%,$ a $3\mathrm{.}0\%$ margin and an index that is based on the one$-$year U$.$S$.$ Treasury bill. Which statement below does not apply to this loan product?

Question $28$Answer

a$.$

The most that the note can adjust in any one year is $2\%$ per year

b$.$

The payment on this note is fixed for the first seven years and then will adjust annually

c$.$

The teaser rate on this note is $3\%$

d$.$

The highest my interest rate can ever be on this note is $8\mathrm{.}875\%$

e$.$

If the one$-$year treasury rate is at $1\%$ when my note adjusts, my new rate will be $4\%$