Data on Real and Nominal Interest Rates of One-Year U

question 16

Multiple Choice

Data on real and nominal interest rates of one-year U.S.T-Bills show that,over the past twenty years,

• A)the nominal rate has always been less than the real rate.
• B)whenever the nominal rate rises, the real rate falls, and vice versa.
• C)the nominal rate has varied, but the real rate has not.
• D)the real rate has varied, but the nominal rate has not.
• E) the real rate has always been less than the nominal rate.

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Definitions:

Initial Margin

The upfront collateral required to open a position in the futures or derivatives market.

Shares

Units of ownership interest in a corporation or financial asset, representing a portion of the company's capital.

Initial Margin

The portion of the purchase price that an investor must deposit when buying securities on margin.

Purchase GM Stock

The action of buying shares in General Motors Company, an American multinational corporation that designs, manufactures, markets, and distributes vehicles and vehicle parts.