Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Oct 05, 2024

6. According to the price leadership model, bank prime rate is 4.75%6, operating cost is 1.75%, risk premium is 2% and term risk is 2%

6. According to the price leadership model, bank prime rate is 4.75%6, operating cost is 1.75%, risk premium is 2% and term risk is 2% What is interest rate on the loan?

(A)10.5%(b)6.50%C.8.75%:D.5.75% e.7.75%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

Step: 3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Markets And Institutions

Authors: Frederic S. Mishkin, Stanley G. Eakins

7th Edition

013213683X, 978-0132136839

More Books

Students also viewed these Finance questions

Question

★★★★★

Cecil C. Seymour is a 64-year-old widower. He had income for 2014 as follows: Pension from former employer ..................................................... $39,850 Interest income from Alto...

Answered: 1 week ago

Question

★★★★★

Lease versus Buy Sidik industries must instali $1 milion of new machinery in its Texss plant. It can obtain a 6 -vear bank loan for 100% of the cost at a 14% interest rate wah equal payments at the...

Answered: 1 week ago

Question

★★★★★

4. If you were helping David with his coaching, how would you describe his strengths and weaknesses? What suggestions would you make to him about how to improve? David Abruzzo is the newly elected...

Answered: 1 week ago

Question

★★★★★

Garrison Shops had a SUTA tax rate of 2.7%. The state's taxable limit was $8,000 of each employee's earnings. For the year, Garrison Shops had FUTA taxable wages of $77,900 and SUTA taxable wages of...

Answered: 1 week ago

Question

★★★★★

6. According to the price leadership model, bank prime rate is 4.75%6, operating cost is 1.75%, risk premium is 2% and term risk is 2% What is interest rate on the loan?...

Answered: 1 week ago

Question

★★★★★

Trader A enters into a forward contract to buy gold for $1000 an ounce in one year. Trader B buys a call option to buy gold for $1000 an ounce in one year. The cost of the option is $100 an ounce....

Answered: 1 week ago

Question

★★★★★

Lopez Company reported the following current-year data for its only product. The company uses a periodic inventory system, and its ending inventory consists of 600 units-200 from each of the last...

Answered: 1 week ago

Question

★★★★★

Laker Incorporated's fiscal year-end is December 31, 2024. The following is an adjusted trial balance as of December 31. Accounts Debit Credit Cash $10,400 Supplies 31,000 Prepaid Rent 22,000...

Answered: 1 week ago

Question

★★★★★

Assume that you are in the 15 percent marginal tax bracket and that you have $10,000 to invest. You have narrowed your investment choices down to California municipal bonds with a yield of 8.5...

Answered: 1 week ago

Question

★★★★★

1. Discount Banners pays $180,000 cash for a group purchase of land, building, and equipment. At the time of acquisition, the land has a market value of $28,500, the building $123,500, and the...

Answered: 1 week ago

Question

★★★★★

Bramble Hardware Limited reported cost of goods sold as follows. 2022 2021 Beginning inventory $27,400 $19,700 Cost of goods purchased 188,100 170,300 Cost of goods available for sale 215,500 190,000...

Answered: 1 week ago

Previous Question Next Question