The risk free rate of interest is equal to the sum of the real rate of interest plus an inflation risk premium.

Name: The risk free rate of interest is equal to the sum of the real rate of interest plus an inflation risk premium.
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Question

Quizplus · Accepted Answer

The risk free rate of interest is often calculated as the real rate of interest plus an inflation risk premium, meaning it reflects both the expected return on investment and the compensation for potential inflation. Therefore, the statement is true.

The Risk Free Rate of Interest Is Equal to the Sum