Kansas RMA Eligibility Practice Exam 2026 - Free RMA Certification Practice Questions and Study Guide

The AG cap rate is set with a fixed range, providing a floor and a ceiling that keep the rate within predictable bounds. This means there’s a minimum acceptable rate and a maximum acceptable rate used in pricing, so lenders aren’t applying extreme values. The specific range states that the cap rate must not be below 11% and must not exceed 12%. This keeps pricing fair and consistent across situations.

Why this makes sense: having a defined floor and ceiling prevents underpricing risk (rates below the floor) and overpricing risk (rates above the ceiling), and it avoids tying the cap rate to other ad hoc adjustments or external rates. The option claiming a fixed add-on, or reliance on a five-year average CoBank rate, aren’t how AG cap rate values are determined, and the option claiming there’s no floor or ceiling contradicts the established range.