Company a Can Borrow Money at a fiXed Rate of 9.5

question 228

Multiple Choice

Company A can borrow money at a fixed rate of 9.5% or a variable rate set at prime plus 0.5% Company B can borrow money at a variable rate of prime plus 1% or a fixed rate of 9% Company A
Prefers a fixed rate and company B prefers a variable rate. Given this information, which one of the
Following statements is correct?

• A) Company A can swap with B and pay a fixed rate of 8.75%
• B) If Company A swaps with B, Company A will pay a fixed rate between 9 and 9.5%
• C) If Company B swaps with A, Company B must pay a fixed rate of 9.5%
• D) Company B can swap with A such that Company B pays the variable prime rate.
• E) There are no terms under which both Company A and Company B can swap interest rates and both realize a profit.

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Definitions:

US

in the context of conditioning, stands for the Unconditioned Stimulus, which automatically triggers a response without any learning needed.

Discrimination Training

A process in behavior analysis used to teach an individual to differentiate between stimuli or behaviors based on reinforcement or punishment.

Generalization

The process of formulating general concepts by abstracting common properties of instances.

Inhibitor

A stimulus signaling that an event is not coming, which elicits a response opposite to the one that the event usually elicits.