Question : Nominal Interest Rate = ___________
Option 1: Real Interest Rate × Inflation Rate
Option 2: Real Interest Rate – Inflation rate
Option 3: Real Interest Rate / Inflation rate
Option 4: Real Interest Rate + Inflation rate
Answer (1)
23rd Jan, 2024
Correct Answer: Real Interest Rate × Inflation Rate
Solution : Nominal interest rate = Real interest rate X inflation rate. The sum of the real interest rate and the anticipated rate of inflation is known as the nominal interest rate. The actual return on a bond (to the investor) and loan (to the lender) is provided by a real interest rate.
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