Figure 32-1 -Refer to Figure 32-1. If the World Interest Rate Equals

question 53

Multiple Choice

Figure 32-1
-Refer to Figure 32-1. If the world interest rate equals 6 percent, what is the net capital outflow?

• A)positive
• B)negative
• C)either positive or negative
• D)Net capital outflow is not determined by the world interest rate.

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Definitions:

Collateral

Collateral that a borrower offers to a lender to secure a loan or credit, which the lender can take possession of if the borrower fails to meet the repayment terms.

Perfection

The process or action of making something completely free from faults or as close to it as possible.

Secured Party

An individual or institution that holds an interest in a secured asset or collateral to secure repayment of a loan or other credit extension.

Collateral

Assets pledged by a borrower to secure a loan or other credit, and subject to seizure on default.