In order to arrive at an actual interest rate,a ________ is an amount added to the bank's theoretical cost of obtain funds to lend.

Question

Quizplus · Accepted Answer

The spread is an amount added to the bank's theoretical cost of obtaining funds to lend, which results in the actual interest rate charged to borrowers. The base rate is the starting point of the calculation, but it does not take into account other factors that impact the final interest rate. Reference and security are not related to the calculation of interest rates.

In Order to Arrive at an Actual Interest Rate,a ________