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Suppose Big Bank offers an interest rate of 6.0% on both savings and loans, and Bank Enn offers an interest rate of 6.5% on both
Suppose Big Bank offers an interest rate of 6.0% on both savings and loans, and Bank Enn offers an interest rate of 6.5% on both savings and loans. a. What profit opportunity is available? b. Which bank would experience a surge in the 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 profit opportunity is available? A. Take a loan from Big Bank at 6.5% and save the money in Big Bank at 6.0%. B. Take a loan from Big Bank at 6.0% and save the money in Bank Enn at 6.5%. C. Take a loan from Bank Enn at 6.5% and save the money in Big Bank at 6.0%. D. Save at both banks
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