Which interest rate is used on very short-term loans from one bank to another?   A. Prime interest rate   B. Commercial paper rate   C. Treasury bill rate   D. Fed funds rate

Q: How does the cost of commercial paper compare with the cost ofshort-term bank loans? With the cost…

A: Commercial paper: It could be a generally utilized sort of short-term, unsecured debt security…

Q: 29. Which of the following statements are true? Statement I. An interest rate reflects the rate of…

A: Interest rate is one of the most important concepts which impacts the financial market in the…

Q: How is the London Interbank Offer Rate (LIBOR) used in the Eurocredit market when a loan is extended…

A: The London Interbank Offer Rate (LIBOR) is the global reference rate for unsecured interbank…

Q: What is a bank discount? How does it differ to simple interest? State the bank discount formula

A: Bank DiscountIt is the Interest amount on the loan that is being subtracted from the principal value…

Q: How does the payment of a bank loan’s principal and a bond’s par value differ?

A: A bank loan is a common method and process for a business to acquire money and capital for various…

Q: How does a bank try to achieve the best possible risk adjusted return on its overall loan portfolio?

A: The possibility of a loss arising from a borrower's inability to repay a loan or meet legally…

Q: Which one of the followings is NOT a money market financial instrument? A) Treasury Bills OB)…

A: Solution:- Money market financial instruments are those financial instruments whose maturity values…

Q: et for a hypothetical central bank is shown below: Central Bank Balance Sheet in photo Write the…

A: Assets are resources that are controlled which results from prior transactions that are expected to…

Q: When interest rates fall, the rates that a bank pays on deposits typically decline less than the…

A: When interest rates fall, the rates that a bank pays on deposits typically decline less than the…

Q: What is the difference between Investment Banks and regular Banks? explain one small paragraph.

A: Introduction: Investment banks are those banks that are specialize in providing institutional bodies…

Q: The financial performance of both Commercial Banks and Savings Banks is measured using the Net…

A: The net interest margin is referred as the net benefit of lending which derived from the lending and…

Q: How does commercial paper differ from a bank loan? Why is the interest rate often less for…

A: Commercial PaperCommercial paper is promissory notes that represent loans issued by the companies.…

Q: a. Bank loans are classified as investment-grade and leveraged bank loans. Explain the difference…

A: (a) Bank Loan extended to corporate borrowers can be segregated into two categories viz.…

Q: The negotiable certificate of deposits issued by banks will lock in the following EXCEPT *…

A: A negotiable certificate of deposit often known as a jumbo CD, is a CD having a minimum face value…

Q: The rate of interest charged on loans from a country perceived to have no risk of defaulting is…

A: Risk-Free Rate: The theoretical rate of return on an investment with no risk is known as the…

Q: Commercial banks are a major source of term loans. These loans are best used for:

A: Commercial banks are financial service providers of small size and mid-size businesses. They provide…

Q: How does the cost of costly trade credit generally compare withthe cost of short-term bank loans?

A: Costly trade credit imply companies that make payments after the discount period as they forego the…

Q: When both deposit and loan interest rates decrease at the same speed in the market, a bank tends to…

A: Loan interest rate is the rate at which interest is charged by bank on the lent amount. Deposit is…

Q: The prime interest rate Multiple Choice is lower than the federal funds rate because it is the rate…

A: PRIME RATE: It is lending rate used by banks at which they lend to customers.

Q: Why would a bank sell a package (portion) of its loans? A) to decrease liquidity B) to increase the…

A: Securitization  is a process wherein individual loans, debts, etc., that involve a payment stream…

Q: When both deposit and loan interest rates increase at the same speed in the market, a bank tends to…

A: When both deposit rates and lending rates increase the bank tends to make profit out of this. Always…

Q: Which type of short-term loan is secured with Treasury bills as collateral?   A. Federal funds…

A: A Treasury Bill  A Treasury Bill is also known as a T-Bill. It is a short-term borrowing instrument…

Q: The _____ rate is the lending rate at which the largest and most creditworthy corporations borrow…

A: The lending of money is dependent upon the credit rating of a corporation. Higher the rating, lower…

Q: If the deposits/loans ratio is relatively high for a bank, this implies an emphasis on: a.…

A: Deposits /Loans as the name suggest implies the number of deposits financed as loans. If it is…

Q: Depositing money into a commercial bank is investing in a

A: Step1: Commercial banks form part of an organized money market. Commercial banks deals in money and…

Q: 49- which of the following source of finance relates to suppliers  ? a. Commercial Paper  b. Credit…

A: There are various sources of finance

Q: he amount of loans that a bank can create is limited by elect one: O a. laws enacted by Parliament.…

A: The amount of loans that a bank can creates limited by - (b) the monetary base, bank's desired…

Q: 50- Which of the following are issued by large commercial banks that can be bought and sold among…

A: A commercial bank is where most people do their banking.

Q: Which of these statements about banks is true: i) Banks cannot convert all deposits in the Reserves…

A: Commercial banks is defined as the financial institution, which accepts the deposits, and offers the…

Q: Which below is not one of the factors determining the mix of banks loan? *       a. Market size…

A: Factors determining the mix of bank loan portfolio: Bank size Customer size characteristics of the…

Q: Which of the following statements is (are) true? (i) Bank certificates of deposits are capital…

A: Financial instruments: Financial instruments are agreements for the use of money that can be bought,…

Q: Explain ARMs and Floating Rate Loans?

A: Loan is referred as the amount which is borrowed from the financial institutions or individual at…

Q: Which of the following are issued by large commercial banks that can be bought and sold among…

A: Money market refers to trading in a very short term debt instrument, it consist for many debt…

Q: Which of the following functions of the Commercial Bank's primary functions is influence by the…

A: Solution:- Reserve Requirement Ratio (RRR)  means the minimum amount of deposit a bank has to keep…

Q: What kind of Interest does a negotiable certificates of deposit issued by large commercial banks…

A: Negotiable certificate of deposits have very high face values and are guaranteed by the banking…

Q: Using the examples from the videos, which of these types of loans require that some principal be…

A: When money is given by one party to another on the promise of repayment at the end of a specified…