If risk,administrative costs,and tax treatments are the same,a borrower will expect to pay _____ interest rate for a 10-year loan,and _____ interest rate for a 5-year loan.

Question

Quizplus · Accepted Answer

Typically, longer-term loans carry higher interest rates due to the increased risk over time. Therefore, a borrower would expect to pay a higher interest rate for a 10-year loan compared to a 5-year loan.

If Risk,administrative Costs,and Tax Treatments Are the Same,a Borrower Will