Author Question: Suppose Annie expects an annual return of 520 from an investment worth 500 . What should be the rate ... (Read 125 times)

waynest · **on:** Jun 30, 2018

Suppose Annie expects an annual return of 520 from an investment worth 500 . What should be the rate of interest charged by her to a risky borrower who is likely to repay the principal and interest with a probability of 0.7?
a. 45 percent
b. 48.6 percent
c. 20.33 percent
d. 53.4 percent

Question 2

If price is cut and demand is inelastic, total revenue will fall because
A) the change in quantity demanded is less than the percent change in price.
B) the percent change in quantity demanded is less than the change in price.
C) the percent change in quantity demanded is less than the percent change in price.
D) customers can find substitutes.