Finance
An adjustable-rate mortgage (ARM) in North Dakota has an initial 'teaser rate' of 3%. After the adjustment period, the rate may change based on:
AThe federal funds rate directly
BA specified index plus a margin, subject to caps✓ Correct
CThe NDREC's published rate schedule
DThe lender's discretion without any cap
Explanation
ARM rates adjust based on a specified financial index (such as SOFR or Treasury bills) plus a margin. Rate caps (periodic and lifetime) limit how much the rate can increase per adjustment and over the life of the loan.
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