Consider the Situations of a Lender and a Borrower of Money.Which

question 56

Multiple Choice

Consider the situations of a lender and a borrower of money.Which of the following situations is most advantageous to the lender?

• A)inflation rate of 0% and a nominal interest rate of 2%
• B)inflation rate of 2% and a nominal interest rate of 7.5%
• C)inflation rate of -1% and a nominal interest rate of 3%
• D)inflation rate of 2% and a nominal interest rate of 4%
• E)inflation rate of 3% and a nominal interest rate of 7.5%

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Definitions:

Voting Trust

A type of shareholder voting arrangement by which shareholders transfer their voting rights to a voting trustee.

Model Business Corporation Act

A template law provided to guide states in the drafting of their own corporate statutes, aimed at promoting uniformity and clarity in corporate governance and activity.

Majority Shareholders

Individuals or entities that own more than half of the shares in a corporation, giving them significant control over the company's decisions.

Voting Trust

An arrangement transferring shareholders' voting rights to trustees, often used to consolidate control of a company.