Question

which factor or factors listed below are internal influences on a loans interest rate?
i. current and prospective inflation
ii. collateral offered by the borrower
iii. the strength of the economy
a. i only
b. i and iii
c. ii only
d. ii and iii

Explanation:

Inflation and economic strength are external factors. Collateral offered by the borrower is an internal factor related to the specific loan - borrower situation.

Answer:

c. II only