Which of the Following Statements Is Incorrect

question 42

Multiple Choice

Which of the following statements is incorrect?

• A) Real cash flows must be discounted at a real discount rate.
• B) (1 + real rate of interest) = (1 + nominal rate of interest )/(1 + inflation rate).
• C) Real rate of interest almost equals "nominal rate of interest - inflation rate."
• D) None of these.

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Definitions:

Fourteenth Amendment

An amendment to the U.S. Constitution, adopted in 1868, that grants citizenship to all persons born or naturalized in the United States, including former slaves, and provides all citizens with equal protection under the laws.

Fifth Amendment

A provision of the U.S. Constitution that provides several protections for individuals, including the right against self-incrimination and the right to due process.

Tenth Amendment

Part of the U.S. Constitution that reserves all powers not delegated to the United States by the Constitution, nor prohibited by it to the States, to the States respectively, or to the people.

Delegated

The act of entrusting another person or entity with specific powers or authority to act on one's behalf.