If a Bank Is Lending Money at 6

question 33

Multiple Choice

If a bank is lending money at 6.25% while the government is lending money at 8.25% and the rate of inflation is 3.5%,what is the real interest being earned by the bank?

• A) 2.00%
• B) 2.66%
• C) 2.75%
• D) 6.25%

---

Definitions:

Shelter Principle

A legal doctrine in property law that allows a person who acquires property in good faith and without notice of prior claims to be protected from those claims.

Holder

In financial terms, an individual or entity that possesses a negotiable instrument, such as a check or bond, legally.

Holder In Due Course

A legal term for a person who has acquired a negotiable instrument in good faith and for value, and thus has certain protections against defenses and claims that could be asserted against the original payee.

Requirements

Conditions or capabilities needed to achieve a specific task or to adhere to standards or regulations.