Finance
An adjustable-rate mortgage (ARM) is best described as:
AA loan with a fixed payment for the life of the loan
BA loan whose interest rate changes periodically based on an index✓ Correct
CA loan for adjustable properties like mobile homes
DA loan that adjusts based on the borrower's income
Explanation
An ARM has an interest rate that adjusts periodically (e.g., annually) based on a market index like LIBOR or SOFR, plus a margin. This means monthly payments can go up or down.
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