13. Jensen Development Co. has obtained a $55 million construction loan from First Bank, Inc. for the construction of a new apartment complex. The loan bears interest, at the option of Jensen, at the prime rate plus 1.5% with a floor rate of 3% or 30-day SOFR plus 2.75% with a floor rate of 2.5%. Which of the following statements is false regarding this construction loan?

A. Jensen will buy an interest rate collar with a floor and cap on the reference rate B. If Jensen does not do a collar, it is subject to paying higher interest than is included in its develop- ment budget C. The SOFR rate is less volatile than the prime rate D. The cost of buying the collar is usually less than the higher interest from the floating rate loan