In which situation do lenders benefit the most from when issuing loans with a variable interest rate?

Question

issuing loans during periods of low interest rates and then interest rates increase
issuing loans during periods of high interest rates and then interest rates decrease
issuing loans during periods of high inflation and then inflation rates decrease
issuing loans during periods of high interest rates that remain constant

Answer 1

Lenders benefit the most from issuing loans during periods of high interest rates and then interest rates decrease. In this scenario, the initially higher interest rate ensures a higher return for the lender. However, if interest rates decrease in the future, the borrowers will continue paying a higher interest rate than the current market rate, resulting in increased profitability for the lender.