Which of these describes the life of a 4/1 ARM loan? The initial rate stays consistent for the first quarter of the loan's term and then adjusts every 4 years for the remainder of the term. The initial rate is in place for 4 years, then adjusts every year for the remainder of the term. The initial rate is in place for 1 year, and then adjusts every 4 years for the remainder of the term. The rate adjusts every 4 years by 1%, either up or down depending on the index rate.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Which of these describes the life of a 4/1 ARM
loan?
The initial rate stays consistent for the first
quarter of the loan's term
and then adjusts every 4 years for the
remainder of the term.
The initial rate is in place for 4 years, then
adjusts every year for the remainder of the
term.
The initial rate is in place for 1 year, and then
adjusts every 4 years for the remainder of the
term.
The rate adjusts every 4 years by 1%, either
up or down depending on the index rate.
Transcribed Image Text:Which of these describes the life of a 4/1 ARM loan? The initial rate stays consistent for the first quarter of the loan's term and then adjusts every 4 years for the remainder of the term. The initial rate is in place for 4 years, then adjusts every year for the remainder of the term. The initial rate is in place for 1 year, and then adjusts every 4 years for the remainder of the term. The rate adjusts every 4 years by 1%, either up or down depending on the index rate.
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