Question

Which is true of variable-rate loans?(1 point) Responses The rate can only go up. The rate can only go up. The rate can only go down. The rate can only go down. 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.

Answer 1

The correct response 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 interest rates that change based on the performance of a specified index, which means they can increase or decrease over time.