Question: Fred is considering a variable interest rate for his loan. The interest rate will start at 5 % and will increase a maximum of 2

Fred is considering a variable interest rate for his loan. The interest rate will start at 5% and will increase a maximum of 2% every third year depending on the state of the economy at that time. Over the life of the mortgage, the cap for the interest rate will be 11%. He has studied past history for this type of mortgage to determine the likelihood of the rate going up to 11% over the life of the mortgage.
This is an example of which type of decision?

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