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Corporate Finance · Quiz 1 · 26 Oct 2025 · September 2025 term

Question 15: Assume there are two periods and prices of consumption g…

Question 15

+4 marksOne correct option

Assume there are two periods and prices of consumption good are the same (and equal to 1) in both periods. You earn Rs 10,000 in period 1 and Rs 12,000 in period 2. In each of the two periods, your spending is equal to earnings in that period. The slope of intertemporal budget constraint is −1.12, then what is the prevailing interest rate?

  1. A

    10%

  2. B

    12%

  3. C

    15%

  4. D

    Insufficient information

Show answer

Correct answer

  • B

    12%

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Question 15 of 25 in the IIT Madras BS Corporate Finance (Corporate Finance) Quiz 1 paper sat on 26 Oct 2025, in the September 2025 term (IIT M DEGREE AN EXAM QDB2 26 Oct 2025). It carries 4 marks.

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