Which is true of variable-rate loans?(1 point) Responses The rate can go up or down, depending upon the index it is tied too. The rate can go up or down, depending upon the index it is tied too. The interest rate can fall below 0. The interest rate can fall below 0. The rate can only go up. The rate can only go up. The rate can only go down.
The rate can go up or down, depending upon the index it is tied to.
The correct answer is: The rate can go up or down, depending upon the index it is tied to.
The correct answer is: "The rate can go up or down, depending upon the index it is tied to."
Variable-rate loans, also known as adjustable-rate loans, have an interest rate that can fluctuate over time. This fluctuation is based on an index, such as the Prime Rate or the London Interbank Offered Rate (LIBOR).
To find the answer to this question, one should have knowledge about variable-rate loans and how they operate. The correct response was determined by understanding that variable-rate loans can move in either direction, depending on the underlying index.
If you were to search for this information, you could start by looking up what a variable-rate loan is and how it functions. This would lead you to understand that the interest rate can go up or down based on the chosen index. Checking reliable sources, such as financial websites or books, would provide more detailed explanations and examples of variable-rate loans.