Banks frequently quote loan rates to customers as the __________ rate plus a spread.

Question

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Banks often use the prime rate as a benchmark for setting loan rates. The prime rate is the interest rate that banks charge to their most creditworthy customers, and it typically serves as the basis for a variety of loan products. When quoting loan rates to customers, banks may specify that the rate is a certain number of percentage points above the prime rate. For example, a bank might quote a loan rate as "prime plus 2%", meaning that the interest rate is two percentage points higher than the current prime rate.

Banks Frequently Quote Loan Rates to Customers as the __________