A ______ chance of default will cause the interest rate to be ______.
A) more variable; lower
B) less variable; higher
C) higher; lower
D) higher; higher

Name: A ______ chance of default will cause the interest rate to be ______. A) more variable; lower B) less variable; higher C) higher; lower D) higher; higher
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Question

Quizplus · Accepted Answer

A higher chance of default makes lending riskier, leading lenders to demand higher interest rates to compensate for the increased risk.

A ______ Chance of Default Will Cause the Interest Rate