Final answer:
The likelihood of payback is not referred to as quantity but rather relates to the borrower's solvency, creditworthiness, or risk, meaning the concept is related to factors that influence a borrower's ability to repay a loan. False.
Step-by-step explanation:
The likelihood of payback concept or the probability that a borrower will repay a loan is not referred to as quantity. This is false. The term 'quantity', especially in economic contexts, is more often related to the quantity equation of money or the amount of goods and services. The probability of payback would rather be related to terms like solvency, creditworthiness, or risk assessment.
For example, the probability that a firm with a record of high profits will repay a loan is high. Therefore, a lender would be willing to pay more for a loan to such a firm, expecting a reliable return on investment. Equations involving probabilities, such as P(RE) ≠ P(R), show that the likelihood of payback could vary depending on factors such as the type of class in which money is left, suggesting that payback is case-specific and influenced by various conditions.