Multiple Choice
A lender may be hurt by inflation in all of the following situations except one.Which is the exception?
A) If the term of the loan is more than one year.
B) If the lender correctly anticipates inflation and increases the nominal interest rate accordingly.
C) If the rate of inflation is greater than anticipated by both borrower and lender.
D) If the rate of inflation is greater than the nominal interest rate.
Correct Answer:
Verified
Correct Answer:
Verified
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