Which of the following statements is true?

Question

Quizplus · Accepted Answer

This statement is known as the risk-return tradeoff, which means that lenders require a higher rate of return for taking on riskier loans. Therefore, a loan to a major corporation would be considered less risky than a loan to a single parent working for a fast food restaurant, resulting in a lower interest rate for the major corporation. The duration of a loan can also have an effect on the interest rate charged, with longer-term loans often resulting in higher interest rates.

Which of the Following Statements Is True