A bank offers credit cards with a 24 percent interest rate, when its competitors' cards have just a 18 percent interest rate. What do you predict will happen? Will the bank profit from its offer?
What will be an ideal response?
Despite the high rate, the bank is likely to suffer losses because many of its customers will fail to repay the balances on their cards and default. The bank's losses are most likely to have occurred because of adverse selection: only very bad borrowers will take on a loan with a higher interest rate than average.
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A marketer of fine French cognac offers a fancy cigar ashtray to persons who correctly solve a crossword puzzle and mail it in. This is an example of a trade promotion
Indicate whether the statement is true or false
A company may prefer to use residual income over return on investment for performance evaluation because ________.
A) residual income is a ratio but return on investment is an absolute figure B) residual income is more likely to lead to goal congruence than return on investment C) residual income is easier to calculate than return on investment D) residual income considers three elements but return on investment considers only two elements
Commas are used correctly in the following sentence: You have a choice of an office on the first floor, second floor, or terrace level
Indicate whether the statement is true or false
Which of the following would be included in a transfer of the ownership of land?
A) mineral rights B) house built on the land C) garage built on the land D) the surface of the land E) All of the above