Suppose Annie Expects an Annual Return of $520 from an Investment

question 69

Multiple Choice

Suppose Annie expects an annual return of $520 from an investment worth $500.What should be the rate of interest charged by her to a risky borrower who is likely to repay the principal and interest with a probability of 0.7?

• A)45 percent
• B)48.6 percent
• C)20.33 percent
• D)53.4 percent

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Definitions:

Weak Methods

Ineffective or insufficient techniques or processes that fail to produce the desired outcome.

Convergence

The process or phenomenon of coming closer together or becoming more similar, often in the context of ideas, objectives, or technologies.

Research Approaches

Various methods or strategies employed in conducting scientific inquiries or investigations.

Integrating Conceptual Framework

A framework that combines multiple theories or concepts to provide a comprehensive understanding of a particular issue or phenomenon.