question 12 of 20. the difference between a nominal interest rate and the rate of inflation is the a. annual…

question 12 of 20. the difference between a nominal interest rate and the rate of inflation is the a. annual percentage yield b. real interest rate c. nominal interest rate d. compound interest

question 12 of 20. the difference between a nominal interest rate and the rate of inflation is the a. annual percentage yield b. real interest rate c. nominal interest rate d. compound interest

Answer

Brief Explanations:

The Fisher - equation in finance and economics states that the real interest rate is approximately the nominal interest rate minus the inflation rate. The annual percentage yield is related to compounding within a year. The nominal interest rate is the stated rate without adjusting for inflation. Compound interest is the interest calculated on the initial principal and the accumulated interest of previous periods.

Answer:

B. real interest rate