Suppose the Nominal Annual Interest Rate on a Two-Year Loan

question 130

Multiple Choice

Suppose the nominal annual interest rate on a two-year loan is 8 percent and lenders expect inflation to be 5 percent in each of the two years. The annual real rate of interest is

• A) 6 percent.
• B) 8 percent.
• C) 2 percent.
• D) 3 percent.

---

Definitions:

Final Disposition

The concluding handling or settlement of remains after death, including burial, cremation, or other methods.

Bereavement Patterns

The various ways individuals and cultures express and process grief following the loss of a loved one.

Other Cultures

Societal groups with distinct languages, traditions, practices, and beliefs that differentiate them from one’s own culture.

Societies Dispose

The ways in which societies manage, discard, or deal with waste materials and unwanted items.