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Question
A bank expects to raise $20 million in new money if it pays a deposit rate of 7%, $60 million in new money if it pays a deposit rate of 7.5%, $100 million in new money if it pays a deposit rate of 8%, and $120 in new money if it pays a deposit rate of 8.5%. The bank expects to earn 9.5% on all money that it receives in new deposits. What is the marginal cost of deposits if the bank raises their deposit rate from 7.5% to 8%?
A. 11%
B. 8.75%
C. 7.75%
D. 7%
E. 0.5%
Answer
This answer is hidden. It contains 1 characters.
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