A ________ is tied to a market interest rate,such as the prime rate or the six-month Treasury bill rate.

Question

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A variable-rate loan is tied to a market interest rate, which can change over time. This means that the interest rate on the loan can go up or down, depending on the performance of the market interest rate it is tied to. By contrast, a prime-rate loan is specifically tied to the prime rate, while a convertible-rate loan and a flexible-rate loan have different characteristics altogether.

A ________ Is Tied to a Market Interest Rate,such as the Prime