Bank lending: Suppose two companies want to borrow money from a bank for a period of 10 years. Company A has excellent credit and can borrow at the prime rate, whereas Company B's credit standing is prime + 2. The current prime rate is 5.75 per cent, the 30-year Treasury bond yield is 4.35 per cent, the three-month Treasury bill yield is 3.54 per cent, and the 10-year Treasury note yield is 4.24 per cent. What are the appropriate loan rates for each customer?

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The Answer of Bank lending: Suppose two companies want to borrow money from a bank for a period of 10 years. Company A has excellent credit and can borrow at the prime rate, whereas Company B's credit standing is prime + 2. The current prime rate is 5.75 per cent, the 30-year Treasury bond yield is 4.35 per cent, the three-month Treasury bill yield is 3.54 per cent, and the 10-year Treasury note yield is 4.24 per cent. What are the appropriate loan rates for each customer?

Bank Lending: Suppose Two Companies Want to Borrow Money from a Bank