How does the cost of costly trade credit generally compare withthe cost of short-term bank loans?

Q: How does the cost of commercial paper compare with the cost ofshort-term bank loans? With the cost…

A: Commercial paper: It could be a generally utilized sort of short-term, unsecured debt security…

Q: What are the factors that may influence the use of money vs credit cards?

A: There are several factors that influence someone's decision to buy goods or services through money…

Q: Importance of the “Teaser Rate” on ARMs—Residential Loans

A: Answer: Introduction: A teaser rate at the beginning of an adjustable mortgage rate (ARM) is the…

Q: How is the London Interbank Offer Rate (LIBOR) used in the Eurocredit market when a loan is extended…

A: The London Interbank Offer Rate (LIBOR) is the global reference rate for unsecured interbank…

Q: In the credit market model with asymmetric information, determine how a consumer will respond to an…

A: Asymmetric information In credit market, asymmetric information means the lenders or the borrowers…

Q: What is the difference between a credit sale (with a higher price as compared to the cash sale) and…

A: The amount of Sales made in credit has to be collected after certain period of time. In case of cash…

Q: efly explain how banks can optimize their position through managing their use of currencies?

A: Step 1   Significant restructuring of the treasury structure and the way companies interact with…

Q: How does commercial paper differ from a bank loan? Why is the interest rate often less for…

A: Commercial PaperCommercial paper is promissory notes that represent loans issued by the companies.…

Q: Bank loans often are arranged under existing lines of credit. What is a line of credit? How does a…

A: LiabilitiesLiabilities are referred to as the obligations of the business towards the creditors for…

Q: How does collection policy influence sales, the collection period, and the bad debtloss percentage?

A: Through the collection policy, an organization is able to identify the various problems associated…

Q: How does high interest rate and setting ceiling on loans (limited credit) compensate for the…

A: Rate of interest is selected as per the credit-score of the borrower compared to the range set by…

Q: How do lenders’ and borrowers’ requirements differ? How can financial intermediaries bridge the gap…

A: Lenders' requirements: The minimization of risk This includes the minimization of the risk of…

Q: why do banks consider interest on loans to be important?

A: Bank is defined as the financial institution, which accepts the deposits from public as well as…

Q: Commercial banks are a major source of term loans. These loans are best used for:

A: Commercial banks are financial service providers of small size and mid-size businesses. They provide…

Q: Describe the trade-offs of extending credit.

A: Accounts receivable: Accounts receivable refers to the amounts to be received within a short period…

Q: at is the relationship of Debt (Loans) to Borrowers to Financial Intermediaries?

A: The financial intermediaries are very important in the financial world and transactions and there…

Q: Why are credits and debits different for banks compared for personal finance usage?

A: In personal account, all expenses, assets, and losses will be debited. All incomes, liabilities, and…

Q: What is a Letter of Credit? Please discuss how a Letter of Credit work. Why is Letter of Credit…

A: What is a Letter of Credit A letter of credit, sometimes known as a "credit letter," is a guarantee…

Q: What is trade credit?

A: Trade credits are advantageous for buyers because they get sufficient time for making their…

Q: Why can’t bank lend without a written loan policy? Explain in detail.

A: Lending procedure: There are certain steps that are followed in the procedure. this includes the…

Q: How do inflationary expectations influence interest rates on mortgage loans?

A: Inflation: It is the rate at which the purchasing power of the money decreases every year.…

Q: types of credit extension? which one is the biggest?

A: Different types of credit extensions are a) Personal loans-granted to individuals on the basis of…

Q: How does peer to peer lending is different from traditional banking lending for Credit Mutuel Group?

A: Peer-to-peer lending is a type of crowd-funding that allows those who wish to invest to lend money…

Q: Explain why a credit crunch occurs in particular why it often occurs after a financial crisis.

A: Credit crunch can be defined as the critical situation where borrowers are not able to borrow money…

Q: What is the significance of credit/debt ratings

A: Credit Ratings: Credit Rating is an estimate of the borrower (be it a person, organization, or…

Q: Why is the Fed’s discount window considered the “lender of last resort” for some banks?

A: The “discount window” refers to the facilities that central banks are offering to commercial banks…

Q: If a bill of exchange is discounted and on the date of maturity such bill of exchange was dishonored…

A: Bill of Exchange According to Negotiable instrument Act there are three types of Negotiable…

Q: What’s the difference between free trade credit and costly tradecredit?

A: Trade Credit is a kind of credit financing extended by the trader or supplier of goods and services…

Q: How does the cost of costly trade credit generally compare with the cost of shorttermbank loans?

A: Trade credit is that the quantity businesses owe to their suppliers on inventory, products, and…

Q: Briefly discuss the following: 1. When does commercial credit occurs? 2. What attributes does…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Calculating the Return On A Loan