To Compensate for the Uncertainty of Future Interest Rates and the Fact

Multiple Choice

To compensate for the uncertainty of future interest rates and the fact that the longer the term of a loan the higher the probability that the borrower will default, the lender typically ________.

A) charges a higher interest rate on long-term loans
B) reserves the right to change the terms of the loan at any time
C) includes excessively restrictive debt provisions
D) reserves the right to demand immediate payment at any time