Suppose the Bank of Montreal Wants a 5% Real Rate

question 106

Multiple Choice

Suppose the Bank of Montreal wants a 5% real rate of return on all its loans,and anticipates an annual inflation rate of 4%.It should therefore lend its money at a nominal interest rate of

• A)10%.
• B)9%.
• C)5%.
• D)4%.
• E)1%.

---

Definitions:

Persuasive Presentations

Oral presentations aimed at convincing the audience about a particular idea or argument through logical reasoning and emotional appeal.

Attitudes

A settled way of thinking or feeling about something, reflecting a person’s beliefs, feelings, and predispositions to respond in a certain way.

Beliefs

Refers to the convictions or acceptances that individuals hold as true, often without immediate evidence.

Course of Action

A plan or strategy that one intends to follow to achieve a specific goal or to resolve a problem.