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A finance company has $20 million of loans with a fixed rate of 6%. The loans are financed with $20 million in CDs at a
A finance company has $20 million of loans with a fixed rate of 6%. The loans are financed with $20 million in CDs at a variable rate of LIBOR plus 2.5%. What is the risk exposure of the finance company? A. If LIBOR goes above 3.5% B. If LIBOR goes under 3.5% C. If LIBOR goes above 8.5% D. If LIBOR goes under 8.5% | |
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