Which of the following best defines the nominal interest rate?
A)It is the interest rate corrected for inflation.
B)It is the interest rate as usually reported by banks.
C)It is the real rate of return to the lender.
D)It is the real cost of borrowing to the borrower.

Question

Quizplus · Accepted Answer

Nominal interest rate refers to the interest rate as usually reported by banks or financial institutions. It does not account for inflation or the real cost of borrowing.

Which of the Following Best Defines the Nominal Interest Rate