The real rate of return on holding cash is equal to:
A)the nominal interest rate.
B)the real interest rate.
C)the expected inflation rate.
D)zero minus the inflation rate.

Name: The real rate of return on holding cash is equal to: A)the nominal interest rate. B)the real interest rate. C)the expected inflation rate. D)zero minus the inflation rate.
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Question

Quizplus · Accepted Answer

Cash has a nominal return of 0 percent. Thus, the real return to holding cash is zero minus the inflation rate.

The Real Rate of Return on Holding Cash Is Equal