Variable rate loans typically have a 1)________ interest rate than fixed rate loans because with variable rate loans, the borrower assumes the risk that the interest rate might 2)_________. Lower, Decrease Lower, Increase Higher, Increase Higher, Decrease

Answers 1. Lower 2. Increase
Variable rate loans typically have a lower interest rate than fixed rate loans because with variable rate loans, the borrower assumes the risk that the interest rate might increase. As compared with fixed rate loans, the starting interest rates of variable rate loans are lower, the risk however, is that the interest rate may increase over time.