When dealing with Caps for an adjustable rate mortgage, the caps on the adjustments are A. relative to the start rate B. relative to the rate from the prior year C. relatively friendly D. relative to the start rate except for the annual adjustment which is relative to the rate in the prior year

If an ARM has a margin of 2.5 and the start rate is 4% and caps of 2/2/5 and the index at the first adjustment is 5, what is the rate? A. 6% B. 7.5% C. 9% D. 6.5%