Money will be lent at what rate of interest under this scenario?

Suppose expectations are such that the rate of inflation for the foreseeable future is pegged at 2%. Show more Suppose expectations are such that the rate of inflation for the foreseeable future is pegged at 2%. Further suppose that lenders and investors are seeking a 4% real return. 37. Money will be lent at what rate of interest under this scenario? A. 2% B. 8% C. 4% D. 6% E. Impossible to determine. 38. Suppose that 4 years from now it is obvious that the actual rate of inflation averaged 1%. Which of the following statements is correct regarding loans initially granted with 4-year terms? A. Both lenders and borrowers meet their objectives. B. There is an arbitrary redistribution of income from lenders to borrowers. C. There is no redistribution of income resulting from the loans. D. There is an arbitrary redistribution of income from borrowers to lenders. 39. Suppose that I have $1000000 in my current retirement portfolio. Further suppose that the dollar value of my portfolio must double for me to retire comfortably. Assuming that I make no further contributions to my portfolio how long must I wait? A. 17.5 years B. 35 years C. approximately 18 years D. None of the above 40. Again assuming that I make no further contributions to my portfolio how long must I wait if I need the value of my portfolio to double in terms of real dollars? A. 17.5 years B. 14 years C. approximately 8 years D. impossible to determine Show less

QUICK QUOTE

Approximately 250 words