When students borrow money for their postsecondary education under the Canada Student Loans Program, they can choose

Question:

When students borrow money for their postsecondary education under the Canada Student Loans Program, they can choose a fixed interest rate of prime 1 5% or a floating interest rate of prime 1 2.5%.
(a) Explain the difference between these two types of interest rates.
(b) Which interest rate-fixed or variable-do you think you would prefer? Explain.