Question

The following loan is not available through the discount window:

A adjustment credit

B primary credit.                

C secondary credit

D seasonal credit

D None of the options is correct.

You are a manager at AAA Bank. You are evaluating the opportunity to offer a wider variety of products (addition of new types of products) and to simultaneously attain cost-reductions, by using the same human resources and physical assets. This new project is an example of:

A Product-line diversification effect

B Economies of scope effect

C Economies of scale effect

D Geographic diversification effect

E None of the options is correct.

The New Country Bank is planning on raising $800 million in a new offering of commercial paper through its holding company. It plans on using $725 million of it to fund new loans. The current interest rate for similar commercial paper is 6.45 percent and it expects 0.25 percent in issuing costs. What is the effective rate of interest on this issue of commercial paper?

A 7.75%

B 6.45 percent

C 7.05 percent

D 7.39 percent

A conventional Repurchase Agreement (RP) is ________ for the borrower than (as) a General Collateral Finance RP.

A more flexible

B less flexible

C as flexible

D less rigid

E None of the options is correct

Answer 1

1.

Discount window is one of the system in lending and borrowing that helps in releiving liquidity foe individual depository institutions. Primary credit, secondary credit, seasoned credit are  available through the discount window. So, Adjustment credit is not available through the discount window.

Option (A) is correct answer.

2.

ou are evaluating the opportunity to offer a wider variety of products (addition of new types of products) and to simultaneously attain cost-reductions, by using the same human resources and physical assets. This new project is an example of Economies of scope effect.

Option (B) is correct answer.

4.

A conventional Repurchase Agreement (RP) is Less Flexible for the borrower than (as) a General Collateral Finance RP.

Option (B) is correct answer.