What Is the Average Implicit Interest Rate on a $100,000

question 59

Multiple Choice

What is the average implicit interest rate on a $100,000 account if the bank's average management costs are $2,500 and annual fees average $1,750?

• A)4.25 percent.
• B)2.50 percent.
• C)1.75 percent.
• D)0.75 percent.
• E)-0.75 percent.

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values.

Budget Line

A graphical representation showing the combination of goods a consumer can purchase with a given income, based on the prices of those goods.

Expected Rate

Typically refers to the anticipated return or performance of an investment over a specific period.

Risk-Free Asset

An investment with a certain return and virtually no risk of financial loss.