Which of the Following Statements Regarding Fixed-Rate Loans Is True

question 48

Multiple Choice

Which of the following statements regarding fixed-rate loans is true?

• A)Fixed-rate loans are preferable when interest rates are expected to rise.
• B)The cost of fixed-rate loans increases with an increase in the market interest rate.
• C)The cost of fixed-rate loans decreases with a decrease in the market interest rate.
• D)Fixed-rate loans are preferable when interest rates are expected to fall.
• E)The interest rates on fixed-rate-loans have periodic adjustment dates, at which time monthly payments are adjusted.

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Definitions:

Segment Reporting

The practice of breaking down financial reports into divisions, product lines, or geographical markets to provide detailed financial information.

Accounting Standards

Guidelines and rules established by accounting organizations for preparing and reporting financial statements.

International Financial Reporting Standards

A set of accounting standards and guidelines developed and maintained by the International Accounting Standards Board (IASB) that is used internationally to ensure financial statements are transparent, comparable, and consistent.

U.S. GAAP

United States Generally Accepted Accounting Principles, a set of rules and standards for financial accounting and reporting in the U.S.