The Interest Rate That Describes How Well a Lender Has

question 84

Multiple Choice

The interest rate that describes how well a lender has done in real terms after the fact is called the

• A)ex post real interest rate.
• B)ex ante real interest rate.
• C)ex post nominal interest rate.
• D)ex ante nominal interest rate.

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Definitions:

Prepaid Property Tax

An expense that has been paid in advance for property taxes, recognized as a current asset until the period it covers arrives.

Bonds

Fixed income investments representing a loan made by an investor to a borrower, often corporate or governmental, which pays periodic interest payments.

Discount

A reduction from the full price or value of a good, service, or financial instrument.

Face Amount

The nominal value stated on the face of a financial instrument, such as a bond, that the issuer promises to pay at maturity.