Question
Matt is a sole trader with a mortgage over his business premises. Matt's mortgage statement from his mortgage lender says that the interest rate charged
Matt is a sole trader with a mortgage over his business premises. Matt's mortgage statement from his mortgage lender says that the interest rate charged is 3% over the Bank of England's Base Rate but he is unclear as to what this means. His financial adviser has made two statements in respect of this:
(1) Each mortgage lender uses a different Base Rate to make the interest calculation
(2) The interest rate that Matt pays will change if the Base Rate changes
What is the validity of the financial adviser's statements?
A. Only statement (2) is true
B. Both statement are false
C Both statement are true
D Only statement (1) is true
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Fundamentals of Investments
Authors: Gordon J. Alexander, William F. Sharpe, Jeffery V. Bailey
3rd edition
132926172, 978-0132926171
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