If the Bank Offers You a Nominal Interest Rate of 9

question 90

Multiple Choice

If the bank offers you a nominal interest rate of 9 percent on a student loan, and if inflation is 6 percent, then what is the real interest rate?

• A) 15 percent.
• B) 9 percent.
• C) 6 percent.
• D) 3 percent.

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Definitions:

Unconscionable Contract

An agreement that is so unfairly one-sided that it is considered oppressive or shocks the conscience of the court.

Article 2A

Pertains to the leasing of goods under the Uniform Commercial Code (UCC) in the United States.

Sotheby's Representative

An individual who acts on behalf of Sotheby's, the international auction house, in dealings with clients and the coordination of auctions and sales.

Valuation

The process of determining the current worth or price of an asset, company, or property.