The Nominal Risk Free Rate of Interest Is a Function

question 15

Multiple Choice

The nominal risk free rate of interest is a function of

• A) the real risk free rate and the investment's variance.
• B) the prime rate and the rate of inflation.
• C) the T-bill rate plus the inflation rate.
• D) the tax free rate plus the rate of inflation.
• E) the real risk free rate and the rate of inflation.

---

Definitions:

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration, a key greenhouse gas contributing to global warming.

Coal

A combustible black or brownish-black sedimentary rock used primarily as a fuel in electricity generation.

Solar Energy

Energy from the sun that is converted into thermal or electrical energy, which is renewable and environmentally friendly.

Renewable Solar Energy

Energy generated from the sun's rays, which is sustainable and inexhaustible, used to produce electricity or heating without emitting greenhouse gases.