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    Foundations of Financial Management Study Set 2
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    Exam 8: Sources of Short-Term Financing
  5. Question
    Ohlin, Meade, and Assoc
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Ohlin, Meade, and Assoc

Question 67

Question 67

Essay

Ohlin, Meade, and Assoc. plans to borrow $1,500,000 for 12 months. Citibank gives the firm a stated rate of 10% interest.
What is the effective rate of interest if the loan is a discounted loan with a 10% compensating balance?

Correct Answer:

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