a. The expected overall payoff of each bank. b. The standard deviation of the overall payoff of each bank.

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Q: The discount rate is the combination of what two types of discounting?   a. exponential and linear…

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A: False  Refer step 2 for explanation

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Q: 3) What is meant by Bank overdraft?

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A: QE ( quantitative easing) is a special situation of monetary policy to use in special economic…

Q: The M.I.R.R. is based on   a Cash flows being reinvested at a rate always different from WACC  b…

A: Modified internal rate of return is an improvement on the internal rate of return method.

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Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.