Which of the following is true of the International Bank for Reconstruction and Development (IBRD)scheme of the World Bank?
A)Resources to fund IBRD loans are raised through subscriptions from wealthy members.
B)The interest rate charged by the World Bank is higher than the commercial banks' market rate.
C)Borrowers have to pay the bank's cost of funds plus a margin for expenses.
D)The bank avoids offering low-interest loans to risky customers whose credit rating is often poor.
E)It was established to approve currency devaluations that are beyond 10 percent.

Question

Quizplus · Accepted Answer

The IBRD scheme of the World Bank requires borrowers to pay the bank's cost of funds plus a margin for expenses, as stated in option C. Option A is incorrect because IBRD loans are funded through the issuance of bonds in international capital markets, not subscriptions from wealthy members. Option B is incorrect because the interest rate charged by the World Bank is typically lower than commercial banks' market rate. Option D is incorrect because the World Bank does provide low-interest loans to risky customers, albeit with higher margins to cover potential losses. Option E is incorrect because the World Bank does not have the authority to approve or disapprove currency devaluations.

Which of the Following Is True of the International Bank