Stuart Mining Is Offered a $4,000,000 Line of Credit for Three

question 65

Multiple Choice

Stuart Mining is offered a $4,000,000 line of credit for three months at an APR of 6%. The bank requires that the firm keep an amount equal to 10% of the loan principal in an account with the bank as long as the loan remains outstanding. This account pays 2% APR with quarterly compounding. What is the actual three-month interest paid on this loan?

• A) 1.6%
• B) 6.6%
• C) 12.6%
• D) 14.6%
• E) 60.9%

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Definitions:

Ingroup Bias

The tendency to favor and extend loyalty to members of one's own group over others, leading to prejudice and discrimination.

Prejudice

A preconceived opinion or bias, often negative, towards people, groups, or subjects without factual justification or knowledge.

Catharsis

A psychological concept that suggests expressing or experiencing strong emotions can lead to a state of psychological relief or liberation.

Aggression

Aggression is behavior aimed at causing harm or pain to others, which can be physical or verbal.