Which is true of variable-rate loans? A. The rate can go up or down, depending upon the index it is tied too B. The rate can only go up C. the rate can only go down D. The interest rate can fall below 0

Answer 1

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

Variable-rate loans, also known as adjustable-rate loans, typically have interest rates that fluctuate based on changes in a specific benchmark index. This means that the interest rate can increase or decrease over the life of the loan based on market conditions and the performance of that index.