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Questions and Answers
Which type of instrument is the interest rate usually applied to?
Which type of instrument is the interest rate usually applied to?
- Bank loans
- Debt instruments (correct)
- Common stock
- Equity instruments
What is the required return usually applied to?
What is the required return usually applied to?
- Bank loans
- Debt instruments
- Common stock
- Equity instruments (correct)
Which factor can influence the equilibrium interest rate?
Which factor can influence the equilibrium interest rate?
- Inflation
- Risk
- Liquidity preference
- All of the above (correct)
What is inflation?
What is inflation?
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What does liquidity preference refer to?
What does liquidity preference refer to?
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Which type of instrument is the required return usually applied to?
Which type of instrument is the required return usually applied to?
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What is the compensation paid by the borrower of funds to the lender called?
What is the compensation paid by the borrower of funds to the lender called?
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What is the cost of borrowing funds from the borrower's point of view?
What is the cost of borrowing funds from the borrower's point of view?
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What does risk lead investors to expect?
What does risk lead investors to expect?
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What does liquidity preference refer to?
What does liquidity preference refer to?
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