If a Bank Is Asked to Quote a Rate on a One-Year

question 20

True/False

If a bank is asked to quote a rate on a one-year loan one year from today and the current interest rate on a one-year loan is 7 percent and a two-year loan is 8 percent, it should quote 9 percent.
A one-year loan one year from today: [(1.08)^2/(1.07)] - 1 = 0.09 = 9%.

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Definitions:

Primary Function

The main or most important purpose or activity that an object or organism is naturally designed to perform.

Range Of Motion

The total ability of a joint to move, typically measured by the extent of its flexing and extending capabilities.

Abbreviation

An economized version of a word or phrase.

ROM

Range of Motion; a measure of the extent to which a joint can go through all of its normal spectrum of movements.