Consider the Case of a Simple One-Period Framework $\times$ 1230% = 00171 = 1

question 44

Multiple Choice

Consider the case of a simple one-period framework. If i = 12.30 per cent and k = 13.87 per cent, what is the risk premium on the corporate loan (round to two decimals) ?

• A) 13.87% - 12.30% = 1.57%.
• B) 13.87% \(\times\) 12.30% = 0.0171 = 1.71%.
• C) 13.87% / 12.30% = 1.13%.
• D) The risk premium equals k = 13.87 per cent.

---

Definitions:

Smartphone Markets

A sector of the technology industry focused on the production, distribution, and sale of smartphones, characterized by rapid innovation and competition.

Tablet Markets

The sector or industry dedicated to the manufacturing, distribution, and sale of tablet computers.

Homogeneous Oligopolists

Firms within an oligopoly market structure that offer products or services that are very similar, making them close substitutes for each other.

Pure Monopoly

A market structure where a single firm controls the entire market for a product or service, with no close substitutes.