1) Consider the below: Fixed Cost: 1.00% Required Profit: 0.25% TPR: 5.00% Assuming that the rate to...
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Question:
1) Consider the below:
Fixed Cost: 1.00%
Required Profit: 0.25%
TPR: 5.00%
Assuming that the rate to the client is the only variable cost, will giving 3.75% to the client as the deposit rate make sense from a cost plus pricing perspective?
a) Yes
b) Impossible to tell with given
c) No
2) From previous question, will decreasing the rate of 3.75% make the deposit more or less profitable for the bank assuming no change in volume from the rate change?
a) No impact
b) Less profitable
c) More profitable
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
Posted Date: