Which of the Following Would Be LEAST Likely to Lower

question 38

Multiple Choice

Which of the following would be LEAST likely to lower the interest rate that a bank offers a borrower?

• A)The number of borrowers seeking funds is low.
• B)The expected inflation rate is expected to be low.
• C)The borrower is judged to have a low degree of risk.
• D)The investment will be for a long period of time.

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Definitions:

Capital Losses

The loss incurred when a capital asset is sold for less than its original purchase price.

Endowment Funds

Long-term funds established by donations that are meant to support a particular organization or cause, where the principal remains intact and the investment income is used for specific purposes.

Investment Time Horizon

The length of time an investor expects to hold an investment before taking the money out.

Pension Liability

The amount of money a company or governmental entity is required to pay into its pension plan to satisfy future pension obligations to retired employees.