Zoro agreed to make a loan to Kenneth based on an interest rate charge of 8% per annum. Which of the following represents a possible value of the expected inflation rate if Zoro wants to earn more than 5% from the loan? Group of answer choices a. 2% b. 3% c. 5% d. 13%

Suppose you obtain a 30-year mortgage loan on which you have to pay a 7.0% (fixed) interest rate. Further suppose that you and your lender anticipate inflation will average 2.0% during the life of the loan. Now suppose the post-loan both inflation rate is actually 1.0% per annum. It follows that your real rate of interest is and, ceteris paribus, financially better off as a result of the difference between the anticipated and the unanticipated rate of inflation. O a. 3%, you are O b. 8%, your lender is Oc. 5%, you are O d. 6%, your lender is Next page

If the price index in 2017 is 132 and the price index in 2018 is 114, the rate of inflation between 2017 and 2018 is    -5.8%            15.8%            6.4%            -13.6%

Karen loaned Jerre $25,000 at 12% interest compounded annually. Jerre will repay the loan in 6 equal end-of-year payments. The estimated inflation rate during this period is 3%. After taking the estimated inflation rate into account, what approximate rate of return is Karen really receiving on the loan? Group of answer choices 5.46% 7.65% 8.74% 9.00%