Identify the Correct Statement About the Interest Rate Charged on Loans.​

question 40

Multiple Choice

Identify the correct statement about the interest rate charged on loans.​

• A)Borrowers considered credit risks are charged low rates of interest on personal loans.
• B)Interest rates are low for personal loans and credit cards as these are backed by collaterals.
• C)Financial institutions pay a higher rate of interest than governments.
• D)The interest rate decreases with the duration of a loan.
• E)Borrowers considered credit risks are given personal loans at zero rates of interest.

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Definitions:

Dividends

Corporate profits shared with shareholders in the form of monetary disbursements.

Significant Influence

The power to participate in the financial and operating policy decisions of a business, but not control them completely, typically associated with ownership of between 20% and 50% of voting stock.

Fair-value Method

An accounting strategy used for valuing and assessing assets and liabilities based on current market prices or estimates.

Equity Method

An accounting technique used to assess the earnings of an investment in another company by recognizing the income earned proportional to ownership interest.