1. Comment upon Kerr memo. What are its major points and how might these affect Deal's Computerland? Is the memo reflective of the manner in which banks lend money?

2. As a means of adding to Deal's information in this matter, calculate the APR for each of the following for the company's $150,000 loan:

a. Simple interest at 8 percent.

i. No compensating balance.

ii. 10 percent compensating balance.

b. Discount interest at 8 percent.

i. No compensating balance.

ii. 10 percent compensating balance.

3. If banks are investing an increasing amount of funds in the money market versus lending to business borrowers, what will this mean to Deal now and in the future.

Rest of the questions and all information in the attachment.