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Question
Consider the case of a U.S. bank operating in the Cayman Islands and a U.S. bank operating in New York. If a business were to apply for a loan in U.S. dollars at the Cayman Island location, then it is probably the case that:
a. The interest rate on the loan is higher than the one in New York.
b. The interest rate on the loan is lower than the one in New York.
c. The interest rates are the same.
d. The interest rate on the loan is lower, but repaid in Cayman Island dollars.
Answer
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