Which of the following is a benefit of floating interest rates?

Floating interest rates, also known as variable interest rates, can fluctuate based on market conditions, allowing borrowers to benefit when rates decrease. When interest rates fall, the cost of borrowing with a floating rate decreases as well, resulting in lower interest payments for the borrower. This can lead to significant savings over time, especially if the borrower is locked into a loan for an extended period. The ability to take advantage of falling interest rates is a key benefit, making option C the appropriate choice.

Fixed cost arrangements, guaranteed higher payments, and having no impact on cash flow do not represent the nature of floating interest rates. A fixed cost arrangement indicates stability in payments, which is not characteristic of floating rates. Guaranteed higher payments also contradict the variable nature of floating rates, where payments are inherently uncertain. Finally, floating rates typically influence cash flow since fluctuations can lead to varying amounts paid in interest over time.