If the Proportion of Bad Borrowers Increases

question 15

Multiple Choice

If the proportion of bad borrowers increases,

• A) the lending interest rate increases.
• B) the lending interest rate decreases.
• C) the borrowing interest rate increases.
• D) the borrowing interest rate decreases.

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Definitions:

Five-Figure Accuracy

A level of precision where a numerical value is rounded to the nearest ten-thousandth place, representing the first five significant digits.

Terminating Decimal

A decimal fraction that has a finite number of digits after the decimal point.

Five-Figure Accuracy

A level of precision in numerical calculations or measurements where the result is accurate to five digits.

Four-Figure Accuracy

A level of precision in numerical representations where the number is rounded or truncated to four significant digits.