Asked by Dinesh Sivanesan on Apr 28, 2024
Verified
Interest rates of various loans vary over a wide range due to differences in all of the following, except
A) borrower characteristics.
B) maturity of the loan.
C) loan size.
D) lender characteristics.
Maturity
The stage in an entity's life cycle, whether a financial instrument, product, or organism, where growth has stopped and it has reached full development.
Borrower Characteristics
Characteristics that describe individuals or entities seeking loans, including their credit history, income level, and financial stability.
- Investigate the influence of characteristics of both borrowers and lenders on the rates of interest.
Verified Answer
KG
Kazuno GatakanoMay 01, 2024
Final Answer :
D
Explanation :
Lender characteristics do not typically cause variation in interest rates of loans. Interest rates are more directly influenced by borrower characteristics, the maturity of the loan, and the size of the loan, rather than who the lender is.
Learning Objectives
- Investigate the influence of characteristics of both borrowers and lenders on the rates of interest.