l T-Mobile LTE * 61% 6:36 PM bbhosted.cuny.edu QUESTION 10 points A bank\'s brea
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l T-Mobile LTE * 61% 6:36 PM bbhosted.cuny.edu QUESTION 10 points A bank's break even interest rate is determined by the following equation from the reading: k gross cost of bank q percentage of safe borrower R bank rate p probability of obtaining revenue (0kpc1) What would cause the overall bank rate R to increase? . A increase in k, gross cost of capital to the bank D.An increase in q, percentate of safe . A decrease in (1-q). percentage of risky Od. None of the above QUESTI 10 points Save Answer Click Save and Submit to save and submit. Click Save All Answers to save all answers Save All Answers Close Window Save and Submi
Explanation / Answer
1. True, Less the chances of bank recovering the lend amount higher interest rate it will charge to bear that extra risk.
2. True Agency probelm occurs when managers do not act with the principle of wealth maximization of shareholders.
3. True, More the chance of bank will recover the lend amount lesser the interest rate will be.
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