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Single Answer MCQ
Q-00045462

Which factor is crucial in determining the interest rate on a loan?

1

The borrower's friendship with the lender

2

Economic conditions and risk assessment

3

The type of collateral provided

4

The loan's purpose

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Sandeep Chaturvedi

Sandeep Chaturvedi

CBSE Social Science & Humanities Reviewer

Social science and humanities educator with 14+ years of experience reviewing CBSE SST, economics, commerce, arts, and vocational content.

M.A. HistoryM.A. Political ScienceB.Ed.

Answer and Solution

Answer

B. Economic conditions and risk assessment

Solution:

Economic conditions and risk assessment are crucial in determining the interest rate on a loan. Lenders evaluate market trends to set rates appropriately.

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