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In Order to Borrow $100,000 for a 5% Loan on a Discount

Question 100

Multiple Choice

In order to borrow $100,000 for a 5% loan on a discount loan basis with a 5% compensating balance; the firm will actually have to borrow:

A) $105,263
B) $111,111
C) $100,000
D) $90,000

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