Suppose You Deposit $10 000 in a Bank That Yields

question 77

Multiple Choice

Suppose you deposit $10 000 in a bank that yields a nominal interest rate of 8 per cent. If you expect inflation to be 6 per cent or lower, then you are expecting to earn a real interest rate of at least:

• A) 1.6 per cent.
• B) 2 per cent.
• C) 4 per cent.
• D) 5 per cent.

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Definitions:

Reasonable Person

A legal standard used to determine how an average person would responsibly act under similar circumstances.

Society Expect

The anticipations or beliefs regarding behavior, norms, or achievements considered standard or desirable by a community or group.

Duty Of Care

Duty of care is a legal obligation to act with a certain level of attention, caution, and prudence to avoid harm to others or their properties.

Foreseeable Risks

Potential dangers or hazards that a reasonable person should be able to predict could occur under certain conditions.