To Compensate for the Uncertainty of Future Interest Rates and the Fact

question 152

Multiple Choice

To compensate for the uncertainty of future interest rates and the fact that the longer the term of a loan the higher the probability that the borrower will default, the lender typically ________.

• A) charges a higher interest rate on long-term loans
• B) reserves the right to change the terms of the loan at any time
• C) includes excessively restrictive debt provisions
• D) reserves the right to demand immediate payment at any time

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Definitions:

Measured Variables

Variables in a study that are quantified or labeled based on empirical observation or experiment.

Independent Variable

The factor in a study that is deliberately changed by the investigator to see how it influences the outcome variable.

Statistically Significant Interaction

An interaction between variables that leads to a difference in outcomes which is unlikely to be due to chance alone, according to statistical analysis.

Means

Statistical averages that are calculated by adding up all the numbers in a set and then dividing by the count of those numbers.