Credit ratings have a direct impact on the interest rate demanded by lenders because it is a measure of risk to the lender.

Name: Credit ratings have a direct impact on the interest rate demanded by lenders because it is a measure of risk to the lender.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Credit ratings assess the borrower's creditworthiness, indicating the likelihood of default. A lower rating suggests higher risk, leading lenders to demand higher interest rates to compensate for the increased risk.

Credit Ratings Have a Direct Impact on the Interest Rate