From the lending bank's perspective, which of the following is an advantage of a floating-rate loan?

Question

Answer

The bank can request repayment of a loan at any time in the contract period.

Answer

The interest rate risk is transferred to the borrower.

Answer

The default risk is completely eliminated.

Answer

The pre-specified interest rate remains in force over the loan contract period no matter what happens to market interest rates.

Answer

Stable interest payments will be received throughout the loan period.

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