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Which of the Following Approximately Describes the Relationship Between the Nominal

Question 56

Multiple Choice

Which of the following approximately describes the relationship between the nominal and real interest rate?


A) R≈r−iR \approx r - i
B) r≈R−ir \approx R - i
C) r−R≈ir - R \approx i
D) r≈R+ir \approx R + i
E) R≈r+i2R \approx r + \frac { i } { 2 }

Correct Answer:

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