Which statement 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

The nominal interest rate is the interest rate as usually reported by banks or other financial institutions. It does not take into account inflation or other factors that may affect the real cost of borrowing or the real rate of return to the lender.

Which Statement Best Defines the Nominal Interest Rate