If the nominal rate of interest is 10%,the risk-free rate of interest is 3%,the default premium is 3%,the liquidity premium is 0.5%,and the maturity premium is 1.5%,then the inflation premium must be ______.
A)2.0%
B)2.5%
C)3.0%
D)none of the above

Question

Quizplus · Accepted Answer

The inflation premium is not given in the question, and cannot be calculated without additional information. Therefore, the correct answer is D, "none of the above."

If the Nominal Rate of Interest Is 10%,the Risk-Free Rate