1. suppose bank one offers a risk-free interest rate of 5.5% on both savings and loans, and bank enn offers a risk-free interest rate of 6% on both savings and loans. a. what arbitrage 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?

Your goal is to have $2,000,000. you have a total of $40,000 today. you invest the $40,000 and want to add to it each month. at 10% annual interest, how much do you need to invest each month in order to bring the total up to $2,000,000 30 years from now?

Match the given situations to the type of risks that a business may face while taking credit. 1. beta ltd. had taken a loan from a bank for a period of 15 years, but its sales are gradually showing a decline. 2. alpha ltd. has taken a loan for increasing its production and sales, but it has not conducted any research before making this decision. 3. delphi ltd. has an overseas client. the economy of the client’s country is going through severe recession. 4. delphi ltd. has taken a short-term loan from the bank, but its supply chain logistics are not in place. a. foreign exchange risk b. operational risk c. term of loan risk d. revenue projections risk

Atrough in the business cycle occurs when