What is the prime rate?
A) It is the highest interest rate in the economy.
B) It is the interest rate for long-term loans on real estate.
C) It is the interest rate offered by commercial banks to their best customers.
D) It is the interest rate consumers pay on new car loans.

Question

Quizplus · Accepted Answer

The prime rate is the interest rate offered by commercial banks to their best customers, typically large corporations with strong credit ratings. It is often used as a benchmark for other loans, such as adjustable-rate mortgages and credit cards.

What Is the Prime Rate