An interest rate that adjusts to current market conditions is called a(n) ________.
A) floating rate
B) fixed rate
C) notional rate
D) arbitrage rate

Question

Quizplus · Accepted Answer

A floating rate adjusts to the current market conditions, whereas a fixed rate remains the same regardless of market changes. Notional rate and arbitrage rate are not commonly used terms in the context of interest rates.

An Interest Rate That Adjusts to Current Market Conditions Is