Subsidized Loans Have the Effect Of

question 30

Multiple Choice

Subsidized loans have the effect of:

• A) Increasing the NPV of the loan, thereby reducing the APV.
• B) Decreasing the NPV of the loan, thereby reducing the APV.
• C) Decreasing the NPV of the loan, thereby increasing the APV.
• D) Increasing the NPV of the loan, thereby increasing the APV.

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Definitions:

Standard Normal Distribution

A normal distribution with a mean of zero and a standard deviation of one, used in statistical analyses.

Probability

A statistical metric that indicates the extent of the chance of an event taking place, expressed within the range from 0 (no chance) to 1 (absolute certainty).

Binomial Probability Experiment

An experiment or process that has exactly two possible outcomes (success or failure) for each trial and where the probability of success is the same for each trial.

Probability

The measure of the likelihood that an event will occur, quantified between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.