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Title: Julio borrows $250 from Ricky. Ricky wants to make a 5% real return on his money, so they both agree ...
Post by: elbthwtkns01 on Apr 28, 2019

Question 1.

Drew wants to borrow $500 from Bob. Bob wants to make 4% real return on his money, so they both agree on an 4% interest rate paid next year. Both don't anticipate the -5% inflation next year. In this case



▸ Drew will pay an 4% real interest rate.

▸ Bob is better off.

▸ Drew will pay an 13% nominal interest rate.

▸ All of these.

Question 2.

Julio borrows $250 from Ricky. Ricky wants to make a 5% real return on his money, so they both agree on a 5% interest rate paid next year. Both don't anticipate the 5% inflation next year. In this case



▸ Ricky is better off.

▸ Julio will pay $15 a year from now on.

▸ Julio is better off.

▸ Ricky will receive more than 5% of real rate of return a year from now.


Title: Julio borrows $250 from Ricky. Ricky wants to make a 5% real return on his money, so they both agree ...
Post by: Brittany08196 on Apr 28, 2019
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Title: Julio borrows $250 from Ricky. Ricky wants to make a 5% real return on his money, so they both agree ...
Post by: elbthwtkns01 on Apr 28, 2019
Thanks


Title: Re: Julio borrows $250 from Ricky. Ricky wants to make a 5% real return on his money, so they both ...
Post by: Elizabeth Wentworth on Apr 2, 2020
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Title: Re: Julio borrows $250 from Ricky. Ricky wants to make a 5% real return on his money, so they both ...
Post by: ssr macau on May 26, 2020
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Title: Re: Julio borrows $250 from Ricky. Ricky wants to make a 5% real return on his money, so they both ...
Post by: Nayeli Palaguachi on Oct 14, 2020
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Title: Re: Julio borrows $250 from Ricky. Ricky wants to make a 5% real return on his money, so they both ...
Post by: easymatt on Oct 14, 2020
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Title: Re: Julio borrows $250 from Ricky. Ricky wants to make a 5% real return on his money, so they both ...
Post by: Diego Garcia1 on Nov 10, 2020
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