Explain the wide discrepancy between these rates

Reference no: EM131123368

Look at the Focus on Ethics box (Ac€A?How Fair Is Check Into CashAc€??) in Chapter 5 of the textbook. These, businesses quote an interest rate of 15% to loan customers (most of whom are fairly unsophisticated) and yet the EAR of the loan is close to 400%. Explain the wide discrepancy between these rates. What do you believe is the correct regulatory response to these types of lenders?

Reference no: EM131123368

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