Which One of the Following Statements Is Correct

question 16

Multiple Choice

Which one of the following statements is correct?

• A)All real interest rates will be positive as long as the inflation rate is positive.
• B)Real rates must exceed inflation rates.
• C)Short-term interest rates are affected by future inflation expectations.
• D)Treasury bill returns tend to vary in direct relation to inflation rates.
• E)The Fisher hypothesis advocates that real interest rates follow inflation rates.