The cost of borrowing money is directly linked to the interest rate a bank's best customers receive on short-term loans,or the __________.
A)the federal funds rate
B)the prime rate
C)the fixed rate
D)the adjustable rate

Question

Quizplus · Accepted Answer

The interest rate that a bank's best customers receive on short-term loans is known as the prime rate. This rate is directly linked to the cost of borrowing money as it is used as a benchmark for determining the interest rates on various loans and credit lines. Therefore, the correct answer is B, the prime rate.

The Cost of Borrowing Money Is Directly Linked to the Interest