The Greater Is the Risk of Non-Repayment of a Loan

question 222

Multiple Choice

The greater is the risk of non-repayment of a loan, the

• A) higher is the expected rate of interest.
• B) longer is the expected time to repay the loan.
• C) lower is the handling charges for the loan.
• D) lower is the expected rate of interest.

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Definitions:

Labor

The exertion of human mental and physical strength in the process of producing goods and rendering services.

Perfectly Competitive

A market structure characterized by many buyers and sellers, homogeneous products, and no barriers to entry or exit, leading to perfect information and the inability of any single entity to influence the market price.

Market Wage Rate

The prevailing rate of pay for a specific job or occupation in a labor market, influenced by supply and demand for labor.