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:

Statistical Inference

The process of using data analysis to deduce properties of an underlying probability distribution.

Estimate

An approximation or educated guess of a certain quantity based on available data.

Population

The entire group or set of items or individuals from which samples may be drawn for statistical analysis.

Statistical Inference

The process of making predictions or decisions about a population based on sample data.