contestada

Suppose Big Bank offers an interest rate of 10.0​% on both savings and​ loans, and Bank Enn offers an interest rate of 10.5​% on both savings and loans. a. What profit opportunity is​ available? b. Which bank would experience a surge in the demand for​ loans? Which bank would receive a surge in​ deposits? c. What would you expect to happen to the interest rates the two banks are​ offering?

Respuesta :

Answer:

Given that,

Big Bank offers Interest rate = 10.0​%

Bank Enn offers interest rate = 10.5​%

(a) One can take the loan from Big bank at 10% and save the money in Bank Enn at 10.5%.

(b) Big Bank would experience a surge in the demand for loans whereas Bank Enn would receive a surge in deposits.

(c) Big bank would increase its interest rate and Bank Enn would decrease its rate.

Otras preguntas