Investment glossary terms beginning with the letter A:

Adjustable Rate Mortgage (ARM)- A mortgage that typically has a short-term fixed interest rate for a specified period of time, after which the interest rate changes to bring the rate the mortgage holder pays in line with market rates. The interest rate is generally based on the prime rate, Treasury bill rate or LIBOR. ARMs typically have a “ceiling” on the interest rate to protect the mortgage holder. Additionally, due to the interest rate risk to the mortgage holder, ARMs generally start with lower initial interest rates than fixed rate mortgages.

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