The type of cap that is not typically listed as one of the standard ARM caps in this context is the annual cap.

Direct answer

For common exam-style questions about ARM caps, the three standard caps are:

  • Initial cap
  • Periodic (or subsequent) cap
  • Lifetime cap

When a question asks, “What is not a type of cap that can be present on an ARM loan?” with choices like Initial cap, Periodic cap, Lifetime cap, Annual cap , the expected correct answer is:

  • Annual cap ✅

Even though in real-world lending some lenders and agencies informally talk about an “annual cap” to describe how much the rate can change in a year, the standard trio of named ARM caps in most learning materials is initial, periodic, and lifetime , which makes “annual cap” the odd one out in that multiple-choice format.