Respuesta :
The correct option is b. a rational firm will not take out a loan for the investment.
What is rate of returns?
The rate of return (RoR) is indeed the net gain or loss of the an investment over a given time period represented as a proportion of the initial cost of the investment.
Some key features of the rate of return are-
- When you calculate the rate of return, we are computing the percentage growth from of the beginning to the conclusion of the period.
- A rate of return (RoR) is a metric that is used to calculate the loss or profit of an investment across time.
- RoR can be applied to a wide range of assets, including equities, bonds, property investment, and art.
- With in simple rate of return calculation, the impacts of inflation are not considered, but they are in the real return rate calculation.
- An internal rate of return (IRR) accounts for the time worth of money.
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The complete question is-
If the interest rate on a loan is higher than the expected return from an investment:
a. the Federal Reserve will conduct expansionary monetary policy.
b. a rational firm will not take out a loan for the investment.
c. the Federal Reserve will conduct contractionary monetary policy.
d. the government will conduct expansionary fiscal policy.
e. a rational firm will take out a loan for the investment.
