Julio Borrows $250 from Ricky

Multiple Choice

Julio borrows $250 from Ricky. Ricky wants to make a 5% real return on his money, so they both agree on a 5% interest rate paid next year. Both don't anticipate the 5% inflation next year. In this case

A) Ricky is better off.
B) Julio will pay $15 a year from now on.
C) Julio is better off.
D) Ricky will receive more than 5% of real rate of return a year from now.