Why Are There Different Interest Rates on Loans and Securities

question 35

Essay

Why are there different interest rates on loans and securities?

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Definitions:

Capacity Utilization

Refers to the percentage of total potential output that is actually being produced at a given time, measuring the efficiency with which a company uses its productive capacity.

Manufacturing Overhead

All indirect costs related to the production process, such as utilities for the factory, depreciation of manufacturing equipment, and salaries of the manufacturing personnel.

Variance

Variance is a statistical measure that represents the dispersion or spread of a set of values, specifically showing how much the values differ from the mean of the set.

Fixed Manufacturing Overhead

Costs associated with manufacturing that do not vary with the level of production, such as salaries of supervisors and rent for factory premises.