A discounted rate for the first adjustment period of an adjustable-rate mortgage that is below the current market rate of interest is called the prime rate.

Question

A discounted rate for the first adjustment period of an adjustable-rate mortgage that is below the current market rate of interest is called the prime rate.​

Quizplus · Accepted Answer

The discounted rate for the first adjustment period of an adjustable-rate mortgage that is below the current market rate of interest is called a teaser rate, not the prime rate. The prime rate is the interest rate that commercial banks charge their most creditworthy customers.

A Discounted Rate for the First Adjustment Period of an Adjustable-Rate