Finance
An adjustable-rate mortgage (ARM) differs from a fixed-rate mortgage in that:
AThe principal balance never changes
BThe interest rate can change periodically based on a market index✓ Correct
CThe monthly payment is always lower than a fixed-rate loan
DIt requires a 30% down payment
Explanation
An ARM has an interest rate that adjusts periodically based on a benchmark index, which means monthly payments can increase or decrease over the life of the loan.
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