Suppose you can receive an interest rate of 2 percent on a certificate of deposit at a
Question:
Suppose you can receive an interest rate of 2 percent on a certificate of deposit at a bank that is charging borrowers 6 percent on new car loans. Why might you be unwilling to loan money directly to someone who wants to borrow from you to buy a new car, even if that person offers to pay you an interest rate higher than 2 percent?
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You would have to take the time and incur the expense to gather information on the borrower ...View the full answer
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