Question
Ronnie loaned Genie ( $ 15,000 ). At the time the loan was made, the expected inflation rate was ( 2 % ). Ronnie desired
Ronnie loaned Genie \\( \\$ 15,000 \\). At the time the loan was made, the expected inflation rate was \\( 2 \\% \\). Ronnie desired to have a \\( 5 \\% \\) real rate of return on the loan. Actual inflation that year was \\( 1.5 \\% \\). What nominal interest rate did Ronnie charge Genie? a) \\( 6.5 \\% \\) b) \\( 0.5 \\% \\) c) \\( 5.5 \\% \\) d) \\( 7 \\% \\)
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Introduction to Finance Markets Investments and Financial Management
Authors: Melicher Ronald, Norton Edgar
15th edition
978-1118492673
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