What is maximum rate the loan can reset

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Reference no: EM132050238

1. Assume the initial rate on a 1/1 ARM is 4.50%. The loan has a margin of +200 basis points above Libor subject to a 5/2/5 rate cap structure. What is the maximum rate the loan can reset to on its 1st reset date?

2. Assume the initial rate on a 1/1 ARM is 4.50%. The loan has a margin of +200 basis points above Libor subject to a 5/2/5 rate cap structure. What would the minimum rate on the index need to be if the cap were hit on the first reset?

Reference no: EM132050238

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