Final answer:
The concept defined in this question is 'Proration', which is a process of dividing or allocating expenses between parties based on time of ownership or usage.
Step-by-step explanation:
The subject of this question is Business. The option that defines the concept of proportionate adjustment of interest, taxes, and insurance is B. Proration.
Proration is the process of dividing or allocating expenses between two parties based on the time of ownership or usage. In the context of real estate, proration is commonly used to distribute expenses such as property taxes, insurance, and interest between the buyer and the seller at the time of closing or another agreed-upon date.
For example, in a real estate transaction, if the closing date is halfway through the year and the annual property tax is $2,000, the seller would be responsible for paying the tax for the first half of the year (prorated amount of $1,000) and the buyer would be responsible for paying the tax for the second half of the year (also $1,000).