Which one of these represents the difference between a nominal rate and a real rate as they relate to project analysis?

Question

Quizplus · Accepted Answer

The difference between a nominal rate (stated or nominal interest rate) and a real rate (effective interest rate adjusted for inflation) is represented by the rate of inflation. In project analysis, it is important to consider the effects of inflation on the project's cash flows and adjust the nominal rate accordingly to arrive at the real rate of return.

Which One of These Represents the Difference Between a Nominal