Which Is Better, a Fixed-Rate Loan or a Variable-Rate Loan

question 6

Multiple Choice

Which is better, a fixed-rate loan or a variable-rate loan?

• A) a fixed-rate loan, because the lender bears the risk that interest rates will go up
• B) a fixed-rate loan, because they generally cost less than variable-rate loans
• C) a variable-rate loan, because they generally cost less than fixed-rate loans
• D) a variable rate loan, because the lender bears the risk that interest rates will go up
• E) Neither is necessarily better; the choice illustrates the "risk and return go hand in hand" principle.

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Definitions:

Interview

Involves a structured conversation where one party asks questions, and the other provides answers, traditionally used for research, journalism, or employment assessments.

Qualitative Survey

A research method that collects non-numerical data to understand concepts, thoughts, or experiences.

Longitudinal Survey

A research method involving repeated observations of the same variables (such as individuals) over short or long periods to detect changes, patterns, or developments.

Prison Environment

The physical and social conditions inside a prison, affecting the behavior and mental health of inmates.