The Real Interest Rate Is

question 71

Multiple Choice

The real interest rate is:

• A) the interest rate not adjusted for inflation.
• B) the "advertised" interest rate.
• C) a description of the return in units of currency.
• D) All of these answers are correct.
• E) None of these answers is correct.

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Definitions:

Municipal Bond

A debt security issued by a state, municipality, or county to finance its capital expenditures.

Corporate Bond

A debt security issued by a corporation to raise capital, whereby the issuer promises to repay the principal along with interest at specified dates.

Tax Bracket

A range of incomes taxed at a specific rate, with different portions of income being taxed at progressively higher rates as income increases.

Collateral

An asset that a borrower offers to a lender as security for a loan, which can be seized if the borrower fails to repay the loan.