The Fisher Effect primarily emphasizes the effects of _____ risk on an investor's rate of return.
A) default
B) market
C) interest rate
D) inflation
E) maturity

Question

Quizplus · Accepted Answer

The Fisher Effect states that the nominal interest rate is equal to the real interest rate plus the expected inflation rate. Therefore, it emphasizes the effects of inflation risk on an investor's rate of return.

The Fisher Effect Primarily Emphasizes the Effects of _____ Risk