Which is true of variable-rate loans? (1 point)

Question

The rate can only go up.

The rate can only go down.

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 statement about variable-rate loans is:

The rate can go up or down, depending upon the index it is tied to.

Variable-rate loans typically have interest rates that adjust periodically based on changes in a benchmark interest rate or other financial index.