True or false? the nominal interest rate on a risk-free investment is approximately equal to the sum of the real rate of interest plus an inflation premium.

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asked Sep 25, 2024 11.8k views

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Questieme · Answer 1 · 2024-09-29T13:59:35+0000

Answer:

True

Step-by-step explanation:

A real rate of interest is the compensation paid by the borrower of funds to the lender. A nominal rate of interest is equal to the sum of the real rate of interest plus the risk free rate of interest. Risk-free rate of interest is equal to the sum of the real rate of interest plus an inflation premium.

True or false? the nominal interest rate on a risk-free investment is approximately equal to the sum of the real rate of interest plus an inflation premium.

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