Frank West Wants to Borrow Money for Three Years to Purchase

question 131

Multiple Choice

Frank West wants to borrow money for three years to purchase a new boat.He has been offered a seven percent fixed rate loan and also a variable rate loan that has an initial rate of five percent.By choosing the variable rate loan,Chuck is:

• A)sharing the interest rate risk with the lender.
• B)increasing his monthly payments.
• C)taking a higher stake in the asset he is purchasing.
• D)repaying the loan over a faster period of time.
• E)pledging collateral.

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Definitions:

Tend-and-Befriend Response

A behavioral response to stress, especially noted in women, which involves nurturing activities and seeking social support.

Adaptive Value

The extent to which a trait or behavior positively benefits a species by influencing the evolutionary fitness of the species, thus leading to adaptation through natural selection.

Self-image

The mental representation an individual creates of themselves, often influenced by social interactions and personal reflections.

Emotional Coping

Methods and strategies used by individuals to manage and process emotions during stressful or challenging situations.