DAS, Inc has a line of credit with FBT Bank that allows DAS to borrow up to $400,000 at an annual
interest rate of 11 percent. However, DAS must keep a compensating balance of 25 percent of any
amount borrowed on deposit at the bank.
DAS does not normally have a cash balance account with
the bank. What is the effective annual cost of credit?
A) 12.59% B) 11.45% C) 16.00% D) 14.67%
D
Business
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For sellers the main benefit of a letter of credit (L/C) is
A) reduced risk because the bank assures the creditworthiness of the buyer. B) reduced risk because the bank assumes the costs. C) greater customer loyalty. D) improved buyer satisfaction.
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What should the null and alternative hypotheses be for ?3?
A) H0 : ?3 = 0, H1 : ?3 > 0 B) H0 : ?3 = 0, H1 : ?3 < 0 C) H0 : ?3 ? 0, H1 : ?3 = 0 D) H0 : ?3 < 0, H1 : ?3 > 0
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