When the credit cycle is at its peak,

I. interest rates are high;
II. defaults are typically low;
III. it's usually the easiest time to borrow money.

Correct Answer: II and III

Credit cycles first go through periods in which funds are relatively easy to borrow; these periods are characterized by lower interest rates, lowered lending requirements, and an increase in the amount of available credit, which stimulates a general expansion of economic activity. These periods are followed by a contraction in the availability of funds.