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The problem facing the US financial system in the late 1980s




The problem facing the US financial system in the late 1980s and early 1990's had which of the following characteristics?;A. Collapse of real estate values;B. International banking competition;C. Increased debt in highly leveraged companies;D. All of the above;Kenneth's Arrows and Bows borrows $10,000 for one year at 12 percent interest. What is the effective rate of interest if the loan is discounted?;A. Less than 12.5 percent;B. More than 12.5 percent, but less than 13.5 percent;C. More than 13.5 percent, but less than 14.5 percent;D. More than 14.5 percent;Compensating balances;A. are used by banks as a substitute for charging service fees.;B. are created by having a sweep account.;C. generate returns to customers from interest bearing accounts.;D. are used to reward new accounts;Koopman's Chickens, Inc. plans to borrow $300,000 from its bank for one year. The rate of interest is 10 percent, but a compensating balance of 15 percent is required. What is the effective rate of interest?;A. Less than 11.4 percent;B. More than 11.4 percent, but less than 11.6 percent;C. More than 11.6 percent, but less than 11.8 percent;D. More than 11.8 percent


Paper#33703 | Written in 18-Jul-2015

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