2. British commercial banks lend to blue chip borrowers (big, secure companies) at the __________ The American equivalent is the prime rate.

base rate

basic rate

discount rate

market rate

3. All other borrowers pay more, depending on the lender's estimation of their present and future solvency, also known as their creditworthiness or __________ or __________.

credit

creditors

credit standing

credit rating

4. Borrowers can usually get a __________ interest rate if the loan is guaranteed by securities or other collateral.

higher

long-term

lower

riskier

5. Banks make their profits from the difference between the interest rate charged to borrowers and that paid to depositors, also known as a __________ or __________.

margin

mistake

range

spread

6. Long-term interest rates are generally higher than short-term ones, except when the central bank temporarily reduces the money supply i.e. makes money __________ or __________.

loose

scarce

tight

uncommon

7. These days many loans are made with __________ or variable interest rates that change according to the supply and demand for money.

drowning

floating

sinking

swimming

8. Borrowers and lenders can sometimes arrange limits beyond which rates cannot move. The upper limit is called a __________ or a __________.

cap

ceiling

roof

summit

9. The lower limit on a variable rate loan is known as a __________.

bottom

carpet

floor

maturity

10. A __________ is an arrangement that fixes both the upper and lower limits.

collar

tie

shirt

suit

11. Central banks cannot determine the minimum lending rate for so-called Eurocurrencies - currencies held __________.

outside their country of origin

in Europe

12. Banks are able to offer better rates to borrowers of Eurocurrencies because there are no __________ imposed by the central bank.

discount rates

maturities

money supplies

reserve requirements