What Must the Rate Be Less Than to Be Worth

question 40

Multiple Choice

What must the rate be less than to be worth it to incur a compensating balance of $20,000 in order to get a 2-percent-lower interest rate on a 1-year, pure discount loan of $200,000?

• A) The rate must be less than 78%.
• B) The rate must be greater than 78%.
• C) The rate must be greater than -78%.
• D) The rate must be less than -78%.

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Definitions:

Chlamydia

A bacterial infection that is sexually transmitted and affects both men and women.

Condoms

Barrier devices used during sexual intercourse to reduce the risk of sexually transmitted infections (STIs) and prevent unintended pregnancies, made of latex, polyurethane, or other materials.

Sexual Pleasure

involves feelings of enjoyment, satisfaction, and fulfillment derived from sexual activity.

Spontaneous

Occurring naturally, without being planned or forced; happening in an impromptu or sudden manner.