Banks are most apt to quote short-term loan rates as:
A)prime plus a spread.
B)prime plus inflation.
C)prime minus inflation.
D)Federal funds plus prime.
E)prime minus the discount.

Question

Quizplus · Accepted Answer

Banks typically quote short-term loan rates as the prime rate plus a spread, which is the additional interest rate charged to the borrower to compensate the bank for its credit risk and operating costs. The prime rate is the interest rate that banks charge their most creditworthy customers, and it is usually based on the federal funds rate.

Banks Are Most Apt to Quote Short-Term Loan Rates As