Credit Rating and Required Rate of Return: Suppose you and Warren Buffett borrow money from a bank. The bank will assess your credit ratings differently. Maybe the bank could offer Warren Buffett a loan without interest since it can be advertised as a bank used by the renowned investor. However, it will likely charge you interest because you have a lower credit rating and less fame than Warren Buffett. The interest rate each borrower faces, based on their creditworthiness, is called the required rate of return for creditors. Under the same conditions, the cost of poverty is much higher for the poor than for the rich. Poverty inherently involves costs. - Joseph’s “just my thoughts”
If capability defines whether you can do something, ability determines how far and how much you can exercise it. Capability is a possible state with a purpose, while ability is a state in which a specific objective is set for achievement. Therefore, without a goal, there is no actual ability. People with such excellent abilities are known as specialists. The result of ability is termed performance, which reflects how well the goal was achieved using that ability. - Joseph’s “just my thoughts”