Would It Be Worth It to Incur a Compensating Balance

question 105

Multiple Choice

Would it be worth it to incur a compensating balance of $9,000 in order to get a 0.70 percent lower interest rate on a 1-year, pure discount loan of $250,000?

• A) Yes
• B) No
• C) Not enough information is given to determine

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Definitions:

Cards

Small pieces of laminated paper or plastic printed with a number, symbol, or illustration, used for playing games, as a medium of exchange, or for identification.

Probability

A statistical concept that quantifies the chance of a given event occurring, often expressed as a ratio or percentage.

Cards

Pieces of thick, flat material, often made of paper or plastic, used for various games, information storage, or special occasions.

All Aces

A term often used to describe a situation, hand, or outcome that is the best possible under the circumstances.