Multiple Choice
Which one of the following statements is correct about a floating interest rate loan if the interest rate is defined as "Prime plus 1 percent"? The interest rate:
A) is set to vary at a rate equal to the prime rate plus 1 percent.
B) can fluctuate up to a maximum of 1% above the current prime rate over the life of the loan.
C) will be fixed at the current prime rate plus 1 percent.
D) will vary with the prime rate but changes will only occur in 1 percent intervals.
Correct Answer:
Verified
Correct Answer:
Verified
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