When Determining the Appropriate Interest Rate to Charge on a Loan

question 64

True/False

When determining the appropriate interest rate to charge on a loan, a bank uses the Federal Reserve's primary credit rate as a benchmark and adds a premium to this rate for less creditworthy customers.

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Definitions:

Ionic Compound

A chemical compound composed of ions held together by electrostatic forces termed ionic bonding, generally formed between metal and non-metal ions.

Calcium

A soft gray alkaline earth metal, symbol Ca, essential for living organisms, particularly in cell physiology and bone formation.

Oxygen

Oxygen, a diatomic gas with the molecular formula O2, is critical for respiration in living organisms and supports combustion.

Ionic Compound

A chemical compound formed by the transfer of electrons from one atom to another, resulting in the formation of positively and negatively charged ions.