Interest rates that are adjusted for expected inflation are known as:
A)Coupon rates
B)Ex ante real interest rates
C)Ex post real interest rates
D)Nominal interest rates

Question

Quizplus · Accepted Answer

Ex ante real interest rates are adjusted for expected inflation, meaning they account for the anticipated rise in prices. Nominal interest rates do not factor in inflation, and ex post real interest rates are adjusted for actual inflation that occurred, rather than expected inflation. Coupon rates refer to the interest rate on a bond, but do not necessarily account for inflation.

Interest Rates That Are Adjusted for Expected Inflation Are Known