Which of the Following Is True of Fixed-Rate Loans

question 61

Multiple Choice

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

• 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:

Long-Term

Refers to holding or considering an investment, obligation, or strategy for a duration that exceeds the short-term period, often years.

Alternative Scenarios

Different potential future events or conditions that are considered for planning, risk assessment, and strategic decision making.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales, earnings, and dividends without increasing its financial leverage or equity.