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:

Cognitive Schemas

Mental frameworks or structures that help individuals organize and interpret information.

Generalizations

The process of forming broad concepts or beliefs based on specific instances or experiences.

Stereotypes

Schemas that allow for easy, fast processing of information about people, events, or objects, based on their membership in particular groups.

Abstract Mental Concept

The ability to understand ideas that are not tied to concrete physical objects or experiences.