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Paper Ltd and Pen Lld are each looking to borrow funds from a commercial bank for 5 years. Paper Ltd has an excellent credit rating
Paper Ltd and Pen Lld are each looking to borrow funds from a commercial bank for 5 years. Paper Ltd has an excellent credit rating and can borrow at the prime fate.! Pen Lid's credit rating is prime rate is 7%. The 30 year Treasury bond yield is 5%, 10-year Treasury bond yield Is 4.5%, 5 year Treasury bond yield is 4%, and the 3-month Treasury bill yield is 3% What loan rate should the bank quote for each of Paper and Pen
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