Property pledged to a lender to guarantee payment

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Reference no: EM132062722

1. Property pledged to a lender to guarantee payment in the event the borrower defaults is called _____.

lost property

liquid assets

insolvency

collateral

2. Morton Company obtains a one-year loan of 2,000,000 Japanese yen at an interest rate of 6 percent. At the time the loan is extended, the spot rate of the yen is $.005. If the spot rate of the yen at maturity of the loan is $.0035, what is the effective financing rate of borrowing yen?

a. 37.8 percent

b. 51.43 percent

c. - 25.8 percent

d. - 6 percent

Reference no: EM132062722

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