Question: it is very important that you show your work from the calculations (right down what you used as PV, i FV, n, cash flows,.....etc. in

it is very important that you show your work from the

it is very important that you show your work from the calculations (right down what you used as PV, i FV, n, cash flows,.....etc. in your calculation)

a. Given the following information, which ARM should have the lowest initial interest rate? ARM1 ARM2 ARM3 % Margin above index 3% 2% 3% Adjustment Interval 6 months 1 year 1 year Interest Rate Cap None 1% per year None (The three ARMs are identical in all other aspects) Briefly explain your answer! (2points)

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