To Encourage Borrowers to Accept Adjustable Rate Mortgages (ARMs) Rather

Multiple Choice

To encourage borrowers to accept adjustable rate mortgages (ARMs) rather than level-payment mortgages, mortgage originators generally offer an initial short-term introductory rate that is less than the prevailing market mortgage rate. This rate is referred to as a(n) :

A) margin rate
B) teaser rate
C) index rate
D) discount rate