The _____ rate of interest is the rate at which the investor can trade current money for future money.
A) risk-adjusted
B) real
C) nominal
D) future spot

Question

Quizplus · Accepted Answer

The nominal rate of interest is the actual rate at which the investor can trade current money for future money. It does not take into account inflation or risk. Real interest rate takes inflation into account and the risk-adjusted rate takes both inflation and risk into account. Future spot rate is an estimation of the future exchange rate between two currencies.

The _____ Rate of Interest Is the Rate at Which