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Business, 12.02.2021 07:30 snikergrace

A financial institution makes an offer to a potential client: choosing between borrowing cash or borrowing gold. Cash can be borrowed at 9.5 % per annum, and gold - at 1.5% per annum. The risk-free interest rate is 6.00% per annum, and storage costs are 0.95% per annum. Explain if the rate of interest on the gold loan is too high or too low in relation to the rate of interest on the cash loan

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