Which of the following would be most likely to lower the interest rate that a bank offers a borrower?
A)The number of borrowers seeking funds is high.
B)The expected inflation rate is expected to be high.
C)The borrower is judged to have a low degree of risk.
D)The investment will be for a long period of time.
E)The number of savers depositing funds at the bank is low.

Question

Quizplus · Accepted Answer

If the borrower is judged to have a low degree of risk, the bank is more likely to offer a lower interest rate as they perceive the borrower as a lower risk. This reduces the potential losses for the bank and allows them to be more competitive in their loan offerings.

Which of the Following Would Be Most Likely to Lower