Finance
Which type of mortgage loan has a fixed interest rate for an initial period, then adjusts periodically based on a market index?
AGraduated payment mortgage (GPM)
BAdjustable-rate mortgage (ARM)✓ Correct
CBalloon payment mortgage
DReverse mortgage
Explanation
An adjustable-rate mortgage (ARM) features a fixed rate for an introductory period, then adjusts at scheduled intervals tied to an index such as SOFR or the Treasury rate, plus a margin. This transfers some interest-rate risk to the borrower.
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