The Effective Financing Rate

question 38

Multiple Choice

The effective financing rate:

• A) adjusts the nominal interest rate for inflation over the period of concern.
• B) adjusts the nominal interest rate for the change in the spot exchange rate over the period of concern.
• C) adjusts the nominal rate for a change in foreign interest rates over the period of concern.
• D) adjusts the nominal rate for the forward discount (or premium) over the period of concern.

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Definitions:

Theories of Motivation

Psychological theories that seek to explain how and why people are motivated to act in certain ways, including needs, desires, and goals.

Drive Theories

Theories suggesting that motivation is primarily based on the needs to reduce internal states of tension and restore homeostasis.

Clark Hull

An influential psychologist known for his drive-reduction theory of learning and motivation within the behaviorist framework.

Primary Motive

Fundamental drives or motivations that are biological in nature, such as hunger, thirst, or the need for sleep.