The nominal rate of interest is composed of
A. the real rate plus an inflationary expectation.
B. the real rate plus a risk premium.
C. the risk-free rate plus an inflationary expectation.
D. the risk-free rate plus a risk premium.
Answer:D
The nominal rate of interest is composed of
A. the real rate plus an inflationary expectation. B. the real rate plus a risk premium. C. the risk-free rate plus an inflationary expectation. D. the risk-free rate plus a risk premium.