Rank Order the Net Charge-Off Rates from High to Low

question 12

Multiple Choice

Rank order the net charge-off rates from high to low for the following loan types:
I. C&I loans.
II. credit card loans.
III. real estate loans.

• A) I, II, III
• B) I, III, II
• C) II, I, III
• D) II, III, I
• E) III, I, II

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Definitions:

Marginal Utility

The supplementary benefit or satisfaction a person derives from the consumption of one more unit of a good or service.

Optimal Time Allocation

The most efficient distribution of one's time across various activities to maximize overall benefit.

Substitution Effect

The change in the quantity of a good consumed as the consumer substitutes other goods that are now relatively cheaper in place of the good that has become relatively more expensive.

Leisure

The time available for purposes other than earning money to buy marketed goods.