An Increase in Which One of These Is Most Apt

question 67

Multiple Choice

An increase in which one of these is most apt to decrease the nominal interest rate?

• A)Liquidity
• B)Interest rate risk
• C)Default risk
• D)Expected future inflation
• E)The relevant tax rate

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Definitions:

Accrue

The process of accumulating or recognizing expenses or income over time, even before cash transactions occur.

Payable

A liability to a creditor, often of a business, that represents an obligation to pay for goods or services received.

Prepaid Insurance

An asset account that represents insurance premiums paid in advance, covering future periods.

Premiums Paid

Amounts paid for insurance coverage or policies over a specified period.