Which of the Following Is True

question 75

Multiple Choice

Which of the following is true?

• A)You should use all of your liquid assets to pay off loans when the return on the investments is high.
• B)Paying off loans is appropriate when the interest rate is high and you have enough liquidity.
• C)Paying off loans is wise whenever the expected rate you will earn on investments is lower than the interest rate on the loan.
• D)Loan payments will not restrict your spending and saving but may prevent you from achieving financial goals.

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Definitions:

Treatment Plant

A facility designed to process wastewater or sewage to remove contaminants and produce effluent that is safe for release into the environment.

Filter

A device or process that removes impurities, particulates, or specific elements from a flow of liquid, air, or data, allowing only desired materials or information to pass through.

Negotiate Costlessly

The ability to come to mutual agreement without incurring any transaction costs or facing obstacles in the negotiation process.

Coase Theorem

Principle that when parties can bargain without cost and to their mutual advantage, the resulting outcome will be efficient regardless of how property rights are specified.