Question

If a bank is offering a higher interest rate of return to investors, the MOST LIKELY impact on borrowers from the same bank is

A)
a decreased savings rate.
B)
an increased savings rate.
C)
a decreased interest rate.
D)
an increased interest rate.

Answer 1

D. an increased interest rate.

Step-by-step explanation:

If a bank is offering a higher interest rate of return to investors, the most likely impact on borrowers from the same bank is D. an increased interest rate. An increased interest rate is what gives investors a higher return because they make money off the interest rates. Banks collect the interest as 'repayment' for the loans they are giving out. This serves as a way for them to protect their investment and also make money off of someone else's loan.

Answer 2

The answer is D. An increased interest rate.
The bank will increase the interest rates on loans to get a return on their expenses.