The Real Risk-Free Rate Is Affected by Two Factors

Multiple Choice

The real risk-free rate is affected by two factors:

A) the relative ease or tightness in capital markets and the expected rate of inflation.
B) the expected rate of inflation and the set of investment opportunities available in the economy.
C) the relative ease or tightness in capital markets and the set of investment opportunities available in the economy.
D) time preference for income consumption and the relative ease or tightness in capital markets.
E) time preference for income consumption and the set of investment opportunities available in the economy.