Real interest rates are rates that
A) Have been adjusted for risk
B) Have been adjusted for inflation
C) Have actually been paid as compared to those are anticipated
D) Are equal to the nominal rate minus the market risk premium
E) Are being paid on the Canadian Treasury securities in the current market

Question

Quizplus · Accepted Answer

Real interest rates are adjusted for inflation to reflect the true purchasing power of the interest earned or paid. Nominal interest rates don't account for inflation and may not give an accurate picture of the true value of the interest rates.

Real Interest Rates Are Rates That