The prime rate
A) is the rate a bank charges its risky customers.
B) has been quite volatile during the past two decades, moving as much as 8 percentage points in a 12-month period.
C) is usually lower than Treasury bill rates.
D) none of these.

Question

Quizplus · Accepted Answer

The prime rate has been quite volatile during the past two decades, moving as much as 8 percentage points in a 12-month period. The prime rate is not necessarily the rate a bank charges its risky customers, and it can be higher or lower than Treasury bill rates depending on market conditions.

The Prime Rate