Which of the following is true of fixed-rate loans?
A)Fixed-rate loans are preferable when interest rates are expected to rise.
B)The cost of fixed-rate loans increases with an increase in the market interest rate.
C)The cost of fixed-rate loans decreases with a decrease in the market interest rate.
D)Fixed-rate loans are preferable when interest rates are expected to fall.
E)The interest rates on fixed-rate-loans have periodic adjustment dates,at which time monthly payments are adjusted.

Question

Quizplus · Accepted Answer

Fixed-rate loans are preferable when interest rates are expected to rise because the borrower can lock in a lower rate for the duration of the loan, avoiding future increases.

Which of the Following Is True of Fixed-Rate Loans