Assume two firms want to borrow money from the bank for

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Assume two firms want to borrow money from the bank for period of one year. Firm A has excellent credit, whereas Firm B's credit standing is such that it would pay. The firm's credit standing is prime + 3 percent. The current prime rate is 6.85 percent, the three-month Treasury bond yield is 4.37 percent, the three-month Treasury bill yield is 3.52 percent, and the 10-year Treasury note yield is 4.26 percent. Now suppose that Firm B decides to get a term loan for 10 years. What is the loan rate for the firm?

Reference no: EM13390887

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