The risk free rate of return is equal to the prime rate plus the expected inflation rate.

Name: The risk free rate of return is equal to the prime rate plus the expected inflation rate.
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Question

Quizplus · Accepted Answer

The risk free rate of return is typically determined by the rate of return on government bonds, which is not directly linked to the prime rate or expected inflation rate. While changes in inflation rates can influence the risk free rate, it is not a direct relationship.

The Risk Free Rate of Return Is Equal to the Prime