A Certain Loan Category Has a 2

question 67

Multiple Choice

A certain loan category has a 2.1% default rate and defaulted loans have a -10% return. Loans that don't default earn whatever rate the bank charges. If the lending bank wishes to earn a 4.5% average return on this loan category, including defaulted loans, what rate must the bank charge each borrower?

• A) 4.752%
• B) 4.811%
• C) 4.925%
• D) 4.756%

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Definitions:

Mexico

A country in North America known for its rich cultural heritage, diverse landscapes, and strong economic sectors such as manufacturing and agriculture.

World Trade Organization

is an international organization that deals with the rules of trade between nations, aiming to ensure that trade flows as smoothly, predictably, and freely as possible.

Assistance

Support or aid given to individuals, businesses, or countries, often in the form of financial help or resources.

Trade Adjustment Assistance Act

A U.S. federal law designed to help workers who have lost their jobs as a result of foreign trade by providing job training and financial assistance.