question archive An ARM has the following characteristics at the outset: index value = 5%, margin = 2
An ARM has the following characteristics at the outset: index value = 5%, margin = 2
Subject:FinancePrice:2.86 Bought12
An ARM has the following characteristics at the outset: index value = 5%, margin = 2.75, teaser rate = 5.50%. The contract interest rate for the first year is:
A. cannot be determined
B. 7.75%
C. 5.50%
D. 5%
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Solution
A teaser rate generally refers to an introductory rate charged on a credit product.
So for the first year, the contract interest rate will be the introductory rate
= 5.50%
