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Variable and Fixed Rate Loans: Determinants of Borrower Demand

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  • Collender, Robert N.

Abstract

Farmers and lenders continually make decisions about fixed and variable rate financing. Conditions are derived and illustrated under which risk-averse farmers will choose to borrow more under each type of financing and under which they will prefer each type of financing when debt is unconstrained or predetermined.

Suggested Citation

  • Collender, Robert N., 1989. "Variable and Fixed Rate Loans: Determinants of Borrower Demand," 1989 Annual Meeting, July 30-August 2, Baton Rouge, Louisiana 270471, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea89:270471
    DOI: 10.22004/ag.econ.270471
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    References listed on IDEAS

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    1. David J. Leatham & Timothy G. Baker, 1988. "Farmers' Choice of Fixed and Adjustable Interest Rate Loans," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(4), pages 803-812.
    2. Merton, Robert C, 1969. "Lifetime Portfolio Selection under Uncertainty: The Continuous-Time Case," The Review of Economics and Statistics, MIT Press, vol. 51(3), pages 247-257, August.
    3. Eddy L. LaDue & David J. Leatham, 1984. "Floating versus Fixed-Rate Loans in Agriculture: Effects on Borrowers, Lenders, and the Agriculture Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(5), pages 607-613.
    4. Robert A. Collins, 1985. "Expected Utility, Debt-Equity Structure, and Risk Balancing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 627-629.
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    Keywords

    Agricultural Finance; Risk and Uncertainty;

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