Question
What is an interest rate that rises and falls with market rates of interest called? Select the correct answer from the options listed below Floating rate Semi-fixed rate Stepped rate Freedom rate
Answer
4.3
(228 Votes)
Ivy
Master · Tutor for 5 years
Answer
Floating rate
Explanation
## Step1:We need to identify an interest rate that varies according to market rates of interest. In economics and finance, two types of interest rates can fluctuate over time--Variable interest rate and Floating interest rate. Variable interest rates change periodically. On the other hand, floating interest rates adjust with prevailing market rates. Therefore, a floating rate is the correct answer.