The Difference Between the Risk-Free Rate and the Interest Rate

question 138

Multiple Choice

The difference between the risk-free rate and the interest rate a particular investor has to pay is called the:

• A) credit spread.
• B) risk premium.
• C) Both of these are true.
• D) Neither of these is true.

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Definitions:

Linear Programming

A mathematical technique used to find the best outcome in a given mathematical model with linear relationships.

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Computer programs designed to assist with analyzing and solving complex problems, often used in various fields like engineering, mathematics, and business.