The Weighted Average of Different Interest Rates Paid on Long-Term

question 49

Multiple Choice

The weighted average of different interest rates paid on long-term borrowings is called the _____.

• A) net present value
• B) cost of debt
• C) cost of equity
• D) cost of capital
• E) exchange risk beta

---

Definitions:

Excess Reserves

are bank reserves held in excess of what is required by the central bank, which can be lent out to earn interest.

Money Expansion Process

The increase in the total amount of money in circulation or in the money supply, facilitated by mechanisms such as lower interest rates or quantitative easing.

Demand Deposits

Bank account balances that can be accessed and withdrawn by the depositor at any time without advance notice.

Money Supply

The complete value of all money resources in an economy during a particular time frame.