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Unanticipated Inflation Generally Hurts Borrowers and Benefits Lenders

question 85

True/False

Unanticipated inflation generally hurts borrowers and benefits lenders.


Definitions:

Leverage Ratio

A financial ratio indicating the level of debt incurred by a business entity against its assets or equity, showing the degree of leverage.

Market-To-Book Value

A ratio comparing a company's current market price to its book value, thereby indicating how much investors are willing to pay above or below the net asset value.

ROA

Return on Assets, a financial ratio that indicates how profitable a company is relative to its total assets.

Debt/Equity Ratio

A financial ratio indicating the relative proportion of shareholder's equity and debt used to finance a company's assets.

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