Question $5(4\mathrm{.}5$ points$)$

The Eurocurrency loan market is characterized by narrow interest rate spreads between deposit and loan rates. This is due in part to which of the following factors?

The Eurocurrency market is a "wholesale" market

Loan amounts are very large, often in excess of $$500,000$

Eurocurrency borrowers are typically large, low$-$risk corporations or government entities

All of the above are legitimate reasons for the narrow spread in the Eurocurrency market