Question

Which statement is an example of collateral?

Question 17 options:

a)	A firm must pay a higher coupon rate on bonds at their issuance due to risk.

b)	Private equity funders demand partial ownership.

c)	Venture capitalists receive partial ownership of a firm.

d)	A bank has the right to take ownership of a factory building if the borrower defaults on the mortgage loan.

In economics, firms continue to invest until:

Question 18 options:

a)	the marginal revenue product of capital equals the cost of capital.

b)	the marginal product of capital equals the cost of capital.

c)	the marginal revenue product of capital exceeds the cost of capital.

d)	the marginal product of capital exceeds the cost of capital.

Innovation leads to all of these EXCEPT:

Question 19 options:

a)	an ability to use scarce resources more efficiently.

b)	a higher average standard of living.

c)	a greater variety of goods and services available for purchase.

d)	an increase in the inherent amount of land and natural resources available.

The cost of capital can be measured by:

Question 20 options:

a)

profit.

b)

rent.

c)

surplus.

d)

interest.

Answer 1

17)option D is correct

collateral is a security for the repayment of a loan and is forfeited when the borrower of a loan do not pay back loan amount .

18) option a is correct

firms continue to invest until the marginal revenue product of capital equals the cost of capital because investment beyond it wont be beneficial and total return will start decreasing .

19)option d is correct

inovation can not increase availble natural resources

20)option D is correct .

on borrowing capital you have to pay interest amount with principal amount therefore interest is cost of capital