Finance

An adjustable-rate mortgage (ARM) that adjusts once a year after an initial fixed period is most accurately described as:

AA balloon mortgage
BA hybrid ARM✓ Correct
CA fixed-rate mortgage
DA reverse mortgage

Explanation

A hybrid ARM combines features of fixed and adjustable mortgages with an initial fixed-rate period (e.g., 5 years) and then adjusts periodically (e.g., annually). Common examples are 5/1 ARMs and 7/1 ARMs.

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