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The Closest Approximation to the Real, Risk-Free Rate of Interest

Question 66

Multiple Choice

The closest approximation to the real, risk-free rate of interest is


A) the short-term Treasury bill rate plus the inflation rate.
B) the short-term Treasury bill rate minus the inflation rate.
C) the 10 year Treasury bond rate minus the inflation rate.
D) the 10 year Treasury bond rate minus the 1 year Treasury bill rate.

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