If the interest rate on a security consists only of the riskless rate, then
A) there is no uncertainty.
B) velocity is constant.
C) the money supply is fixed.
D) the price level is fixed.

Question

Quizplus · Accepted Answer

If the interest rate on a security consists only of the riskless rate, then there is no uncertainty. This is because the riskless rate is a guaranteed rate of return, meaning there is no risk involved in investing in such a security. Therefore, investors can be certain about the return they will receive, and there is no uncertainty involved.

If the Interest Rate on a Security Consists Only of the Riskless