Your firm seeks to obtain a short-term loan from a local bank. The banker quotes you a rate of 9%. This is a real rate.

Name: Your firm seeks to obtain a short-term loan from a local bank. The banker quotes you a rate of 9%. This is a real rate.
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Question

Quizplus · Accepted Answer

The rate quoted by the banker is likely a nominal rate, which includes both the real rate of return and the expected inflation rate, not just the real rate of return.

Your Firm Seeks to Obtain a Short-Term Loan from a Local