Which One of the Following Statements Is Correct About a Floating

question 7

Multiple Choice

Which one of the following statements is correct about a floating interest rate loan if the interest rate is defined as "Prime plus 1 percent"? The interest rate:

• A) is set to vary at a rate equal to the prime rate plus 1 percent.
• B) can fluctuate up to a maximum of 1% above the current prime rate over the life of the loan.
• C) will be fixed at the current prime rate plus 1 percent.
• D) will vary with the prime rate but changes will only occur in 1 percent intervals.

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Definitions:

Stacked Column Chart

A variant of the column chart that segments each column into multiple categories, representing parts of the whole.

Cross-hatching

An artistic technique used to create tonal or shading effects by drawing closely spaced parallel lines that may intersect with another set of parallel lines.

Columns

Structural elements in architecture that serve as support, or in writing, divisions of text in a page layout.

Clustered Bar Chart

A graphical representation where bars related to different categories are placed next to each other for comparison.