Which of the Following Statements Is Correct

question 28

Multiple Choice

Which of the following statements is correct?

• A)Real cash flows must be discounted at a real discount rate
• B)Nominal cash flows must be discounted at a nominal rate
• C)(1 + real rate of interest) = (1 + nominal rate of interest)/(1 + inflation rate)
• D)All statements are correct

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Definitions:

Temperature

A physical quantity representing the degree of hotness or coldness of an object or substance, usually measured in degrees Celsius, Fahrenheit, or Kelvin.

Powdered Sugar

Finely ground sugar, often mixed with a small amount of anti-caking agent to prevent clumping, used in baking and confectionery.

Sugar Cube

A small, solid piece of refined sugar, typically used to sweeten beverages.

Electrolyte

A substance that produces an electrically conducting solution when dissolved in a polar solvent, such as water.