Finance
Which type of mortgage allows the interest rate to adjust periodically based on an index, which is common in Rhode Island coastal property financing?
AFixed-rate mortgage
BAdjustable-rate mortgage (ARM)✓ Correct
CBalloon mortgage
DReverse mortgage
Explanation
An adjustable-rate mortgage (ARM) has an interest rate that adjusts periodically based on a specified index plus a margin. ARMs are sometimes used for financing higher-priced coastal properties.
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