Question

What is the prime rate?

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.

Answer 1

I think the answer is A

Answer 2

The answer is: a. The prime rate is the best interest rate that banks offer their most creditworthy customers.

In order to be considered as 'creditworthy' , there are several requirements that must be fulfilled by the customers. Such as:

- The customers have collateral for their credit (could be in the form of saving account or private assets)

- The customers never maxed out their credit card

- The customers never late to pay their debt.

- The customers have a steady income.