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Based on the following information, which of the following is true about Reliance?

a) Increase in market share
b) Decrease in net profit
c) Stable customer base
d) High debt-to-equity ratio

1 Answer

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Final answer:

The question about Reliance cannot be answered with the supplied information, as it pertains to financial markets instead. An increase in the quantity of loans is associated with a rise in demand or supply, and a decline in interest rates is often due to a rise in the supply of funds or a fall in demand for loans.

Step-by-step explanation:

Based on the information provided, none of the options about Reliance's market share, net profit, customer base stability, or debt-to-equity ratio can be determined as there is no relevant data supplied. Instead, the provided details pertain to financial market dynamics and the effects of changes in demand and supply on loan quantities and interest rates.

Loan Quantity

An increase in the quantity of loans made and received in the financial market is typically influenced by factors such as demand and supply. When there is a rise in demand for loans, the quantity of loans made and received will tend to increase due to a higher number of borrowers seeking funds.

Conversely, a rise in supply of loans implies that lenders have more capital to offer, which also leads to an increase in the quantity of loans. Therefore, both an increase in demand and an increase in supply can contribute to a higher quantity of loans in the financial market.

Interest Rates

As for the changes that will lead to a decline in interest rates, a rise in the supply of loanable funds can result in lower interest rates. This is because more available capital from lenders competes to be loaned out, thus reducing the cost of borrowing, i.e., the interest rate. On the other hand, a fall in demand for loans can also reduce interest rates as lenders may lower rates to attract borrowers.

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