Question
Each of these statements describes a variable rate loan EXCEPT...
A.
Typically starts with a lower interest rate than a fixed rate loan
B.
Is riskier to the borrower because the interest rate could increase substantially
C.
Is almost always a better option
D.
Can increase or decrease the interest rate over the course of the loan
A.
Typically starts with a lower interest rate than a fixed rate loan
B.
Is riskier to the borrower because the interest rate could increase substantially
C.
Is almost always a better option
D.
Can increase or decrease the interest rate over the course of the loan
Answers
GPT-4o mini
The statement that describes a variable rate loan EXCEPT is:
C. Is almost always a better option
This statement is misleading because whether a variable rate loan is a better option depends on various factors, including the borrower's financial situation, market conditions, and the specific terms of the loan. Variable rate loans can carry more risk due to potential rate increases, so they are not universally "better."
C. Is almost always a better option
This statement is misleading because whether a variable rate loan is a better option depends on various factors, including the borrower's financial situation, market conditions, and the specific terms of the loan. Variable rate loans can carry more risk due to potential rate increases, so they are not universally "better."