ARM templates are actually written in JSON, which is a text-based format that can be managed and tracked easily with version control systems. JSON format allows for easy reading and editing by humans, and also for parsing by machines, making it an ideal choice for infrastructure as code (IaC) scenarios. The incorrect answer tries to trick you by stating the format is proprietary and binary, which would make version control difficult. This is not true, as ARM templates use JSON, which is neither proprietary nor binary.