The cost of borrowing money that is reserved for large corporations with excellent credit ratings is called the
A) prime interest rate.
B) bank discount.
C) discount factor.
D) add-on interest rate.
E) compound interest rate.

Question

Quizplus · Accepted Answer

The prime interest rate is the cost of borrowing money that is reserved for large corporations with excellent credit ratings. It is typically lower than other interest rates since these corporations are deemed less risky borrowers.

The Cost of Borrowing Money That Is Reserved for Large