An inflation free rate of return and inflation premium is two components of_________?
Correct answer: A. Quoted rate
- A. Quoted rate
- B. Unquoted rate
- C. Steeper rate
- D. Portfolio rate
Explanation
The quoted or nominal rate combines the inflation-free real rate with an inflation premium, and may also include other risk premiums. An unquoted or portfolio rate is not the standard term for this combination.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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