Finance
An adjustable-rate mortgage (ARM) differs from a fixed-rate mortgage in that:
AThe ARM has no interest at all
BThe interest rate on an ARM can change periodically based on an index✓ Correct
CThe ARM requires no down payment
DThe ARM must be paid off within 5 years
Explanation
An adjustable-rate mortgage has an interest rate that can change at specified intervals based on a market index (like SOFR or CMT). This means monthly payments can increase or decrease over the life of the loan.
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