Which One of the Following Statements Is Correct

question 62

Multiple Choice

Which one of the following statements is correct?

• A) The risk-free rate represents the change in purchasing power.
• B) Any return greater than the inflation rate represents the risk premium.
• C) Historical real rates of return must be positive.
• D) Nominal rates exceed real rates by the amount of the risk-free rate.
• E) The real rate must be less than the nominal rate given a positive rate of inflation.

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