An Interest Rate Spread Is

question 8

Multiple Choice

An interest rate spread is

• A) the difference between long-term and short-term interest rates.
• B) the difference between nominal and real interest rates.
• C) the difference between lending and borrowing interest rates.
• D) the difference between public and commercial interest rates.

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Definitions:

Double-declining-balance Method

A depreciation approach that speeds up the process by using a rate twice that of the typical straight-line method.

Sales Price

The amount of money charged for a product or service, or the sum a customer pays to purchase something.

Salvage Value

The presumed value for resale of an asset at life’s operational end.

Depreciation

The methodical reduction of the recorded cost of a fixed asset to allocate its expense over its useful life.