If Lenders Think That a Particular Borrower Might Default, They

question 146

Multiple Choice

If lenders think that a particular borrower might default, they will demand a:

• A) higher interest rate to make it worth taking that risk.
• B) lower interest rate to make it worth taking that risk.
• C) higher interest rate to decrease the amount of risk incurred.
• D) lower interest rate to decrease the amount of risk incurred.

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Definitions:

Dynamic Roles

Roles that evolve and change in response to the situation, context, or interactions among group members or participants.

Descriptive Norms

Descriptive norms refer to the perception of what is commonly done in specific situations, guiding behavior by informing individuals about what is considered typical or normal.

Injunctive Norms

Socially accepted beliefs about what behaviors are approved or disapproved of in a society, guiding individuals on how they should behave.

Harmonizer

A role within a group characterized by efforts to reduce tension and conflict among members by encouraging cooperation and understanding.