Exhibit 9-2 a Customer Has Approached a Local Credit Union for a for a $20,000

question 17

Essay

Exhibit 9-2
A customer has approached a local credit union for a $20,000 1-year loan at a 10% interest rate. If the credit union does not approve the loan application, the $20,000 will be invested in bonds that earn a 6% annual return. Without additional information, the credit union believes that there is a 5% chance that this customer will default on the loan, assuming that the loan is approved. If the customer defaults on the loan, the credit union will lose the $20,000.
-Refer to Exhibit 9-2.Should the credit union purchase the report if it costs $150

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Definitions:

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors.

Analytic Ability

The skill to study or determine the nature of a problem or subject by breaking it down into its smaller parts.

Sternberg

Refers to Robert Sternberg, an American psychologist known for his theories on intelligence and creativity.

Objective Tests

Assessments that have fixed answers and are scored without bias, often in the form of multiple-choice, true/false, or fill-in-the-blank questions.