Finance
A mortgage where the interest rate adjusts periodically based on an index is called a(n):
AFixed-rate mortgage
BAdjustable-rate mortgage (ARM)✓ Correct
CGraduated payment mortgage
DBalloon mortgage
Explanation
An adjustable-rate mortgage (ARM) has an interest rate that changes at specified intervals based on a benchmark index (such as SOFR), subject to caps on periodic and lifetime adjustments.
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