A Company That Wishes to Lock in an Interest Rate

question 14

True/False

A company that wishes to lock in an interest rate on future borrowing can either enters into a FRA or it can borrow long-term funds and lend short-term.

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Definitions:

Normal Good

A good for which demand increases when income increases and falls when income decreases, all other factors being equal.

Income Increased

A rise in the amount of money earned from work, investments, or other sources.

Consumption of Strawberries

Refers to the amount of strawberries that are eaten or used by consumers within a specific period.

Commodity X

A placeholder term for any generic good or service in economic discussions or models.