Suppose You Have a Adjustable Rate Mortgage with a Present

question 146

Multiple Choice

Suppose you have a adjustable rate mortgage with a present interest rate of 13%.The current rate is set according to an interest rate index that had a rate of 15% when the current rate on your home loan was determined.Assuming that adjustments are unlimited in either direction,what is the interest rate on your home mortgage in the next adjustment period if the interest rate index is at 14%?

• A)12%
• B)13%
• C)14%
• D)15%

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Definitions:

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