Majestic Bank offers loans at various interest rates, depending on the nature of

Question

Majestic Bank offers loans at various interest rates, depending on the nature of the loan Yakov and Ana both want to borrow $55,000 as a personal loan from the bank. Yaka werks for a small startup company, and his annual earnings depend on how the company performs that year. Ana works for a long-establishe Yakov y. She receives a stable salary, with a bonus if the company performs well during the year. Assume that the duration and the costs of makin .She recetiesastable salary, with s bonus f the company performs well during the year. Assume that the duration and the costfingAna ns are the same. If all else is constant, the bank would most likely charge a higher interest rate toY

Explanation / Answer

The bank would most likely charge a higher interest rate to Yakov because the bank would perceive Yukov to have higher risk of default than Ana as Yakov is working in a small startup company and his annual earnings is not stable when compared to Ana.

Benefits in earnings from going to college is $ 60,000 while the total cost of going to college is -$ 40,000

Students who want to maximize monetary benefits do not want to invest in their own human capital.

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