Suppose a business borrower is quoted a loan rate of two percentage points above the prevailing prime interest rate posted by leading U.S.banks.This is an example of the:

Question

Quizplus · Accepted Answer

The loan rate quoted to the business borrower is two percentage points above the prevailing prime interest rate, which is the basis for the prime-plus pricing method. This method adds a premium to the prime rate to determine the interest rate charged to borrowers. The other options are not relevant to this scenario.

Suppose a Business Borrower Is Quoted a Loan Rate of Two