Assume There Are No Prospective Investment Projects (I)that Will Yield

question 21

Multiple Choice

Assume there are no prospective investment projects (I) that will yield an expected rate of return (r) of 25 percent or more,but there are $5 billion of investment opportunities with an expected rate of return between 20 and 25 percent,an additional $5 billion between 15 and 20 percent,and so on.If the real interest rate is 15 percent in this economy,the aggregate amount of investment will be:

• A) $25.
• B) $20.
• C) $15.
• D) $10.