Assume There Are No Prospective Investment Projects (I) That Will

question 138

Multiple Choice

Assume there are no prospective investment projects (I) that will yield an expected rate of return (r) of 25 percent or more, but there are $5 billion of investment opportunities with an expected rate of
Return between 20 and 25 percent, an additional $5 billion between 15 and 20 percent, and so on.
The investment demand curve for this economy is shown in which table?

• A) \[\begin{array} { | c | r | }
• \hline r & l \\
• \hline 25 \% & \$ 10 \\
• \hline 20 & 15 \\
• \hline 15 & 20 \\
• \hline 10 & 25 \\
• \hline 5 & 30 \\
• \hline 0 & 35 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | r | }
• \hline r & l\\
• \hline 25 \% & \$ 0 \\
• \hline 20 & 5 \\
• \hline 15 & 10 \\
• \hline 10 & 15 \\
• \hline 5 & 20 \\
• \hline 0 & 25 \\
• \hline
• \end{array}\]
• C) \(\begin{array} { | c | c | }
• \hline r & l \\
• \hline 20 \% & \$ 10 \\
• \hline 15 & 20 \\
• \hline 10 & 30 \\
• \hline 5 & 40 \\
• \hline 0 & 50 \\
• \hline
• \end{array}\)
• D) \[\begin{array} { | c | c | }
• \hline r & l \\
• \hline 25 \% & \$ 5 \\
• \hline 20 & 10 \\
• \hline 15 & 15 \\
• \hline 10 & 20 \\
• \hline 5 & 25 \\
• \hline 0 & 30 \\
• \hline
• \end{array}\]

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