Multiple Choice
Which of the following is true of the real risk-free rate of interest?
A) Most experts think that the real risk-free rate fluctuates in the range of 15 to 20 percent in the United States.
B) The real risk-free rate must include a component for the average inflation.
C) The real risk-free rate is the sum of nominal rate of interest and the average inflation rate.
D) It is easy to measure the real risk-free rate precisely.
E) It is the rate of interest that would exist on default-free U.S. Treasury securities if no inflation were expected in the future.
Correct Answer:
Verified
Correct Answer:
Verified
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