The nominal rate of interest is defined as the sum of the nominal risk-free rate of return and the expected inflation rate.

Name: The nominal rate of interest is defined as the sum of the nominal risk-free rate of return and the expected inflation rate.
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Question

Quizplus · Accepted Answer

This statement is true. The nominal rate of interest includes both the nominal risk-free rate of return (the rate of return on an investment with no risk) and the expected inflation rate.

The Nominal Rate of Interest Is Defined as the Sum