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Financial Institutions Who Have Loaned Money at a Fixed Rate

Question 96

Multiple Choice

Financial institutions who have loaned money at a fixed rate of interest will most likely:


A) experience losses if the inflation rate is higher than anticipated.
B) experience losses if the inflation rate is lower than anticipated.
C) earn an increased profit margin between the interest paid on deposits and the interest received on loans.
D) benefit if the inflation rate is higher than anticipated.

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