Find the Equation of Variation If the Following Is True $p$

question 78

Multiple Choice

Find the equation of variation if the following is true.
-Suppose $p$ varies directly as $\mathrm { q }$ and $\mathrm { p } = 1$ when $\mathrm { q } = \frac { 1 } { 11 }$

• A) \(p = 12 q\)
• B) \(\mathrm { p } = 11 \mathrm { q }\)
• C) \(\mathrm { p } = \frac { 1 } { 11 } \mathrm { q }\)
• D) \(p = 10 q\)

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Definitions:

Default Risk Premium

The additional return that an investor demands for taking on the risk that the borrower may default on the loan.

Liquidity Risk Premium

An additional return that investors require for holding securities with less liquidity, compensating for the risk of not being able to sell quickly at the fair market price.

Inflation Rate

The speed at which the average price of goods and services increases, leading to a decrease in buying power.

Pure Rate

Pure rate, in finance, could refer to the actual interest rate without the influence of inflation or to the risk-free rate of return, which is the theoretical return of an investment with zero risk.