An Investment of $1,000 in the Bank at an Annual

question 288

Multiple Choice

An investment of $1,000 in the bank at an annual interest rate of 4% at the same time that prices rise by 2.5% generates a real return of:

• A) 1.5%.
• B) 2.5%.
• C) 4%.
• D) 6.5%.

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Definitions:

Tolerance for Risk

is the degree to which an individual, investor, or organization is willing to endure uncertainty and potential losses in pursuit of potential gains.

Total Payments

The sum amount of money transferred from one party to another, often referring to the complete payables in transactions, loans, or settlements.

Entrepreneur

An individual who starts and runs a business, assuming the risks and rewards associated with the venture, often innovating and driving economic growth.

Highly Valued Uses

These are applications or purposes for which a resource, product, or service is considered particularly beneficial or desirable, attracting higher willingness to pay.