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Unformatted text preview: b. Increases the cost of borrowing c. Forces firms to borrow more than they need 4. Cost of bank financing a. Effective interest 1. Loan amount 2. Interest paid 3. Length of loan 4. Method of payment b. Effective rate Interest/principal interest x 360 days/ days of the loan Effective rate = interest/P-CB x 360/days of the loan III. Commercial paper A. A 1. Issue at below prime 2. Avoid compensating balance IV. Freeze borrowing A. Euro dollar loan foreign loans denominated in the US dollar. B. Sub borrow many denominated in the foreign currency, converted to dollar and loaned to the US parents....
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This note was uploaded on 04/29/2008 for the course FINA 10100 taught by Professor Markert during the Spring '08 term at Ithaca College.
- Spring '08