Which of the following statement(s) is(are) true?
A) Inflation has no effect on the nominal rate of interest.
B) The realized nominal rate of interest is always greater than the real rate of interest.
C) Certificates of deposit offer a guaranteed real rate of interest.
D) None of the options are true.

Question

Quizplus · Accepted Answer

All the statements provided are false. A) Inflation affects the nominal rate of interest, as it typically leads to higher nominal rates to compensate for the loss of purchasing power. B) The realized nominal rate of interest is not always greater than the real rate of interest; it depends on inflation and other factors. C) Certificates of deposit offer a guaranteed nominal rate of interest, not a real rate, as the real rate can be affected by inflation, which is unpredictable.

Which of the Following Statement(s) Is(are) True