Bank A pays 5% simple interest on its savings account balances while Bank B pays 4% interest compounded semi-annually. If you decide to save $10,000 in each bank, how much interest will you have earne

The answer is d. All of these options. Bank loans to business firms are usually short-term in nature because banks want to minimize their risk exposure by lending money for a shorter period of time. Additionally, banks prefer loans to be self-liquidating, meaning that the proceeds generated by the borrowing firm from the loan should be sufficient to repay the loan. Finally, some bank loans may require compensating balances, which are minimum balances that a borrower must maintain in its bank account, in order to mitigate the risk of default. Therefore, all of the options listed in the answer are true for bank loans to business firms.