BU 2012 complete) Suppose Bank One offers a risk-free interest rate of 10.0% on both savings and loans and Bank Enn offers a risk-free interest rate of 10.5% on both savings and loans a. What arbitrage opportunity is availablo? b. Which bank would experience a surge in demand for loans? Which bank would receive a surge in deposits? c. What would you expect to happen to the interest rates the two banks are offering? a. What arbitrage opportunity is available? (Select the best choice below) O A. Take a loan from Bank One at 10.5% and save the money in Bank One at 10.0% OB. Take a loan from Bank One at 10.0% and save the money in Bank Enn af 10.5% OC. Take a loan from Bank Enn at 10.5% and save the money in Bank One at 100% OD. Save at both banks. b. Which bank would experience a surge in demand for loans? Which bank would receive a surge in deposits (Select the best choice below) O A. Bank One would experience a surge in the demand for loans as will Bank Enn OB. Bank One would experience a surge in deposits while Bank Enn would receive a surge in loans OC Bank One would experience a surge in the demand for loans while Bank Enn would receive a surge in deposits OD. Bank One would experience a surge in the demand for deposits Will Bank Enn C. What would you expect to happen to the interest rates the two banks are offering Select the best choice below) Click to select your answer Type here to search