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ADJUSTABLE -TERM FINANCING OF FARM LOANS
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Abstract
Firm-level simulation is used to analyze farm financial performance with adjustable-rate, adjustable-term, and fixed-rate financing. Adjustable-term financing is accomplished by changing the term of the loan, instead of payment size, when interest rates change. Simulation results indicate that the adjustable-term loan is an innovation which reduces the cash flow destabilizing effects of volatile interest rates.Agricultural Finance,