Generally, Long-Term Loans Have Higher Interest Rates Than Short-Term Loans

question 155

Multiple Choice

Generally, long-term loans have higher interest rates than short-term loans because of

• A) the general expectation of higher future rates of inflation.
• B) lender preferences for shorter-term, more liquid loans.
• C) greater demand for long-term rather than short-term loans relative to the supply of such loans.
• D) all of the above.

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