Bridget Wants to Make an 8% Real Return on a Loan

question 52

Multiple Choice

Bridget wants to make an 8% real return on a loan that she is planning to make, and the expected inflation rate during the period of the loan is 10%. She should charge an interest rate of:

• A) 18%.
• B) - 2%.
• C) 8%.
• D) 2%.

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Definitions:

Effort-performance Probability

The perceived likelihood that one's effort will lead to successful performance in a task or role.

Expectancy Model

A psychological theory stating that individual motivation to engage in an activity is influenced by the expected outcome and the personal importance of that outcome.

Cafeteria Compensation

A flexible benefits plan that allows employees to choose from a variety of pre-tax benefits options to best suit their individual needs.

Goal Setting

The establishment of clear, specific, measurable, achievable, relevant, and time-bound objectives, often considered crucial for successful personal and organizational planning.