Suppose Regulators Cap the Maximum Interest One Can Charge at 5

question 5

Multiple Choice

Suppose regulators cap the maximum interest one can charge at 5 percent.Let the underlying market interest rate be 8 percent.Charging anything lower will drive you out of business. You devise a compensatory balance scheme: for every $100 that the customer borrows,she will have to keep a certain amount with you as a compensatory balance.What should the amount of the loan and the compensatory balance be if the customer wants to borrow $5,000?

• A) $5,000 loan and $1,000 as compensatory balance
• B) $5,000 loan and $1,500 as compensatory balance
• C) $5,000 loan and $3,000 as compensatory balance
• D) $8,000 loan and $3,000 as compensatory balance
• E) $8,000 loan and $5,000 as compensatory balance

Recognize the origin and application of matrix structures in organizational design.

Comprehend the impact of decentralization on governmental and organizational performance.

Identify the role of standardization in ensuring consistent work performance.

Grasp the concept of coordination in organization and its importance in achieving consistency.

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Definitions:

Resources

Assets, materials, or supplies used in the operation of a business, execution of a project, or in the creation of goods and services.

Maximize Button

The maximize button is a control on a window's title bar that enlarges the window to fill the entire screen or returns it to its previous size.

Restore Down

A function in window management that reduces a maximized window to its previous size and position on the screen.

Shut Down

The process of closing all software applications and turning off a computer or device safely.