Author Question: The demand for loanable funds is downward sloping because the ________ the interest rate, the ... (Read 73 times)

BRWH · **on:** Jun 29, 2018

The demand for loanable funds is downward sloping because the ________ the interest rate, the ________ the number of profitable investment projects a firm can undertake, and the ________ the quantity demanded of loanable funds.

A) greater; greater; greater B) lower; greater; greater
C) greater; smaller; greater D) lower; smaller; greater

Question 2

If the present value equation used to calculate the price of a stock you are considering buying is 7 / (0.04 - 0.03), which of the following is correct, assuming that dividends will grow at a constant rate?

A) The dividend is 7 per share, the dividend growth rate is 4 percent, and the interest rate is 3 percent.
B) The stock price is 700, the dividend growth rate is 3 percent, and the interest rate is 4 percent.
C) The stock price is 7, the dividend growth rate is 3 percent, and the interest rate is 1 percent.
D) The dividend is 7 per share, the dividend growth rate is 1 percent, and the interest rate is 4 percent.