One Bank offers a 2% variable rate loan all competitor offers a 3% fixed rate loan over the same period it is likely better to choose the fixed rate loan even though the interest rate is higher because the rate on the 1. is open to fluctuations 2. variable loan appears less active 3. variable loan can increase dramatically 4. variable loan will never increase

The right answer for the question that is being asked and shown above is that: "2. variable loan appears less active." One Bank offers a 2% variable rate loan all competitor offers a 3% fixed rate loan over the same period it is likely better to choose the fixed rate loan even though the interest rate is higher because the rate on the variable loan appears less active