Finance
A 'teaser rate' on an Alaska ARM loan is best described as:
AThe fully indexed rate at the time of application
BAn artificially low initial interest rate that adjusts upward after the initial period✓ Correct
CThe rate after the first adjustment
DThe rate cap on the loan
Explanation
A teaser rate is an initial interest rate below the fully indexed rate, used to qualify borrowers or attract them to the loan. After the introductory period, the rate adjusts to market levels, often causing payment shock.
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