Multiple Choice
If a lender desires to earn a return of 4 percent on a loan and the anticipated rate of inflation is 3 percent,the lender should charge a
A) Real interest rate of 1 percent.
B) Nominal interest rate of -7 percent.
C) Real interest rate of -1 percent.
D) Nominal interest rate of 7 percent.
Correct Answer:
Verified
Correct Answer:
Verified
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