Lenders Generally Want a Higher Interest Rate to Compensate Them

question 38

Multiple Choice

Lenders generally want a higher interest rate to compensate them when loans stretch over a longer period because:

• A) the opportunity cost increases over time.
• B) there's more uncertainty about potential future investment opportunities.
• C) lenders want to be compensated for being unable to get their money back quickly.
• D) All of these are true.

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Definitions:

Negative Affective State

A mood or emotional condition characterized by feelings such as sadness, anxiety, or anger.

Self-Concept Clarity

A clearly defined, internally consistent, and temporally stable self-concept.

Self-Complexity

The extent to which an individual’s self-concept consists of many different aspects.

Multiple Aspects

Refers to considering or examining a subject, idea, or situation from varied viewpoints or components.