The Allocative Function of Interest Rates Allocates Between

question 2

Multiple Choice

The allocative function of interest rates allocates between:

• A)between banks,non-banks institution and borrowers.
• B)banks and borrowers.
• C)surplus spending units (SSUs)and deficit spending units (DSUs)and among financial markets.
• D)Both A and B.

Apply compound interest formulas to calculate the future and present value of investments.

Understand the impact of compounding frequency on investment growth.

Calculate the withdrawal capacity of an investment over a specified period.

Understand the concept of loan amortization and calculate the duration and payments for amortized loans.

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Definitions:

Employer

An individual or organization that hires and pays people to perform specific jobs or services.

Employees

Individuals who are hired by a company or another person to perform work in exchange for compensation under a contract of employment, whether oral or written.

Human Capital

The collective skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value to an organization.

Training

The process of enhancing the skills, capabilities, and knowledge of employees for the purpose of improving job performance.