Question: Question 4 2 pts James Bond took out a 4/1 ARM five years ago with initial rate of 5% and 3/2/6 cap. The interest rate

Question 4 2 pts James Bond took out a 4/1 ARM

Question 4 2 pts James Bond took out a 4/1 ARM five years ago with initial rate of 5% and 3/2/6 cap. The interest rate benchmark is 20-year Treasury bond and margin is 2.5%. In the fifth year, the Treasury bond rate (index rate) is 6.5%. Then James has to pay the interest rate of: O 11% 09% 8% 6.5%

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