Andwers these four questions

Credit rationing by an FI involves restricting the quantity of loans made available to individual borrowers. returns. results from positive linear relationship between interest rates and expected loan returns. is not used by at the retail level. Involves rationing consumer loans using price or interest rate differences. is only relevant to banks. Which of the following is true of the prime lending rate? It is most commonly used in pricing longer-term loans. It is the lending rate charged to the FI's lowest-risk customers. It is also known as LIBOR. It is the rate for interbank dollar loans of a given maturity in the Eurodollar market The best and largest borrowers commonly pay above this lending rate. What is the essential idea behind RAROC? Evaluating the actual or contractually promised annual ROA on a loan. Analyzing historic or past default risk experience. Balancing expected interest and fee income less the cost of funds against the loan's expected risk E