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    Uncertainty of future interest rates

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    To compenstae for uncertainty of future interest rates and the fact that the longer the term of a loan the higher the probability that the borrower will default, the lender typically _______

    charges a higher interest rate on long-term loans, reserves the right to change the terms of the loan at any time, includes excessively restrictive debt provisions, or reserves the right to demand immediate payment at any time

    I believe - charges a higher interest rate on long-term loans - is the answer - please advise answer & why - thanks!

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    Solution Summary

    The uncertainty of future interest rates are determined.

    $2.49

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