Chuck Spencer wants to borrow money for six years to purchase a new car. He has been offered a seven percent fixed rate loan and also a variable rate loan that has an initial rate of five percent. By choosing the variable rate loan, Chuck is reducing the lender's risk by:

Multiple Choice

sharing the interest rate risk.

increasing his monthly payments.

repaying the loan over a faster period of time.

pledging collateral.

taking a higher stake in the asset he is purchasing.