29
QuizMultiple Choice

N/A — Exam

Question 29 • Financial Math

Which feature is part of an adjustable-rate mortgage (ARM)?

Answer
A
The monthly payment is based on a borrower's income level.
B
The interest rate remains fixed for the life of the mortgage.
C
The interest rate changes at specified intervals based on market indices.
D
The mortgage term is fixed, but the payment schedule is adjustable.

Explanation

An adjustable-rate mortgage has an interest rate that can change over time according to a market index, often at specified intervals. This means the payment may also change when the rate adjusts. Choice C describes this feature; choice B describes a fixed-rate mortgage.

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