answersLogoWhite

0


Best Answer

TRUE!

User Avatar

Wiki User

14y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: The Prime rate is the lending rate at which the largest and most creditworthy corporations borrow money from banks?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Related questions

What is the definition of a money market bank?

Money market banks are a large financial service firm that offer commerical lending service. They lend and borrow from governments, banks and large corporations.


What is the cost of borrowing for large us corporations?

When corporations borrow money they usually borrow from investors. When they do this, they are selling pieces of their business.


How do you borrow money from a lending institution?

Fill out an application for a loan.


When banks borrow money from each other?

Banks usually borrow money from one another when they are running short of cash. They charge a smaller interest (when compared to what interest gets charged to a normal loan customer) when they lend money to other banks. This lending interest rate is called Inter-Bank Lending Rate. Banks even go to the central bank of their country to borrow money if they need it.


What are the 2 general kinds of library?

Most are lending libraries - where you can borrow a bookThere are also a few reference libraries- where you can only look at them and not take them out.


Why are mortgage rates rising?

The mortgage rates are rising because prime lending rates are rising. When money to lend is scarce, it becomes more expensive to borrow.


How can a person that has a felony buy a house?

Short answer: Can't do it! There are the prime and subprime lending markets. It is a fair bet that most all of the borrowers in the subprime lending market do not have any felony convictions. Everybody watching the news these last few months is probably weary of the news of the crash in the sup-prime lending market. Hugh lending institutions are going out of business after having bought into the concept of lending mortgage money to people who, for various reasons such as credit history, job stability, debt, education level, income level, did not qualify for borrowing money at the attractive interest rates offered to borrowers who qualify for the "prime" lending market. Another way of looking at sub-prime lending is to say that for various reasons sub-prime mortgage borrowers were not as credit worthy as prime lending market borrowers. This made rational the idea that they (lenders) could exact higher interest rates from people who were less creditworthy yet, who desired to borrow money to buy real estate. All this to say that convicted felons are much worse lending targets than the thousands of people who make up the sub-prime lending market. So in the lingo of old agrarian America: Convicted felons will have a "hard row to hoe" when it comes to borrowing money to buy homes. Chai Xiuchi, Dallas Texas


How do corporations raise cash?

In addition to issuing bonds, corporations may borrow directly from any loan source, such as banks. On occasion, corporations raise needed cash by authorizing and selling additional stock.


What corporate characteristic causes the rate of return and rate of equity percentage to be different?

The total liabilities because Assets = Liabilities + Owner's Equity. Corporations can borrow money to finance their company, therefore however much you borrow affects assets and owner's equity.


What are the problems of bank lending in the U.S.?

Well, when you borrow money, you get in a lot of debt if you don't pay the bank back. What happens is: because you're in debt, you'll borrow more and more money, which you won't be able to pay back. You'll need some serious help.


Why is trust important to the functioning of the economy?

Without some trust that the loan will be repaid, lending will cease and firms will not be able to borrow to invest in production. Production will cease, or at least slow dramatically.


What is the difference between lend and borrow?

I could offer to lend money to you, and if you wished you could borrow that money from me. Or, you could lend me a book, which I would then borrow from you. Lending implies the item loaned will be returned to the lender in some way; borrowing also implies the item borrowed will be returned to the lender. So the two terms have that in common.