Question

A mortgage where the interest rate fluctuates and is usually tied to an index; payment amount increases are capped for each period and for the term of the loan is called
a Reverse Annuity Mortgage (RAM).
a wraparound mortgage.
a participation mortgage.
an Adjustable-rate Loan (sometimes called an ARM).

Answer 1

Answer:

an Adjustable-rate Loan (sometimes called an ARM).

Explanation:

A variable-rate mortgage, adjustable-rate mortgage (ARM), or tracker mortgage is a home mortgage with the rate of interest on the bond changed regularly depending on a measure that represents the financing expense to the applicant on the financial markets.

The loan can be given at the regular variable rate / base rate of the lender. There may be a direct and legally defined link to the underlying index, but where the lender does not provide any specific link to the underlying market or index the rate may be changed at the discretion of the lender.