First National Bank Owns a Data Processing Company That Sells

question 113

Multiple Choice

First National Bank owns a data processing company that sells financially related data processing services to various businesses in the community. Daniel Tyler, a loan officer, is negotiating a loan to a local CPA firm. He would like to make the loan conditional on the CPA firm's use of the subsidiary data processing firm. May he do so?

• A) Yes, because it is not a bank service.
• B) Yes, because it is not related to pricing.
• C) No. It is an illegal tie-in.
• D) No, unless the company was planning to obtain a new data processing service provider anyway.

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Definitions:

Exchange Rate

The value of one currency for the purpose of conversion to another currency.

Francs

Francs refer to the currency that was used in several countries, including France, Switzerland, and Belgium, before the introduction of the euro in some of these countries.

Laspeyres Price Index

A measure of price changes that uses the quantities of goods and services purchased in a base period to calculate the index.

Paasche Price Index

A price index that measures the price changes between the current and a base period, weighted by the current period's spending patterns.