The "risk-free" interest rate is the sum of:

The "risk-free" interest rate is the sum of:


a. a real rate of interest and an inflation premium

b. a real rate of interest and a default risk premium

c. an inflation premium and a default risk premium

d. a default risk premium and a liquidity premium

e. a liquidity premium and a maturity premium


Answer: a real rate of interest and an inflation premium


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