Suppose That a Bank Wishes to Make a 5% Rate

question 120

Multiple Choice

Suppose that a bank wishes to make a 5% rate of return on a one-year loan but expects inflation over the course of the loan to be roughly 3%. Which of the following is TRUE?

• A)As long as the bank charges a nominal interest rate of at least 5%, it will earn its expected return.
• B)If the bank charges an interest rate of 8% or higher, it will earn the expected return.
• C)If the bank charges 8% and the inflation rate is less than 3%, then the bank will have earned a higher rate of return than expected.
• D)If the bank charges 8% and the inflation rate is more than 3%, then the bank will have earned a higher rate of return than expected.

Explain the concept of collective vs. individual socialization and its relevance to organizational culture and behavior.

Understand the significance of realistic job previews in managing employee expectations and reducing reality shock.

Describe the role of socialization tactics in facilitating organizational socialization and the assumption of organizational roles.

Identify the mechanisms through which newcomers seek information and adapt to new organizational roles.

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Definitions:

Book Value

Book value is the net value of a company's assets found on its balance sheet, calculated as the total assets minus intangible assets and liabilities.

Par Value

The nominal face value of a security as stated by the issuer, often used in reference to bonds or shares.

Paid-in Capital

Funds raised by a company through the sale of stock or other equity instruments, reflecting the investment made by shareholders.