Finance
An adjustable-rate mortgage (ARM) is characterized by:
AA fixed interest rate for the life of the loan
BAn interest rate that adjusts periodically based on a market index✓ Correct
CA balloon payment at the end of 5 years
DNo interest charges in the first year
Explanation
An ARM has an interest rate that changes periodically based on a market index (such as SOFR), causing monthly payments to rise or fall accordingly.
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