6
QuizMultiple Choice

Topic Test

Question 6 • FowU - Financial Math - B

What is the prime rate?

Answer
A
The prime rate is the best interest rate that banks offer their most creditworthy customers.
B
The prime rate is the interest rate on a credit card, unadjusted for interval compounding.
C
The prime rate is the number which indicates your credit history.
D
The prime rate is the highest interest rate allowed by law.

Explanation

The prime rate is the benchmark interest rate banks offer their most creditworthy customers. It can also influence rates on loans and credit cards, but it is not a credit-history score or a legal maximum interest rate. Therefore, the correct choice is “the best interest rate that banks offer their most creditworthy customers.”

AI-written and checked against the verified answer.

Previous
Next