Which One of the Following Statements Is Correct

Which one of the following statements is correct?

A) All real interest rates will be positive as long as the inflation rate is positive.
B) Real rates must exceed inflation rates.
C) Short-term interest rates are affected by future inflation expectations.
D) Treasury bill returns tend to vary in direct relation to inflation rates.
E) The Fisher hypothesis advocates that real interest rates follow inflation rates.

Correct Answer:

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