The Real Risk-Free Rate Depends on the Real Growth in the Economy

question 66

True/False

The real risk-free rate depends on the real growth in the economy and can be affected for short time periods by temporary tightness or ease in the capital markets.

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Definitions:

Creditor/Debtor Transaction

A financial agreement involving a creditor providing funds or resources to a debtor who in return promises to repay the creditor.

Real Property

Immovable property such as land, buildings, and other structures that are permanently attached to the land.

Chose in Action

A personal right not attached to any physical property, recoverable by a lawsuit, such as debts, copyrights, or patents.

Chattels

Personal property that is tangible and movable.