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If Inflation Is Zero, Then the Nominal and Real Interest

question 125

True/False

If inflation is zero, then the nominal and real interest rates are the same.


Definitions:

Semiannual Interest

The payment of interest on a loan or bond twice a year.

Bond Interest Expense

The cost incurred by an issuer of bonds for the interest payments made to bondholders.

Cash

Liquid assets held by a company or person, used for transactions or as a store of value.

Maturity Date

The date on which a financial obligation must be repaid or settled in full.

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