Interest Rates Can Be Expressed in Real or Nominal Terms

Interest rates can be expressed in real or nominal terms.Which of the following is most correct?

A) Market rates are always expressed in real terms,because it is important that inflation be included in financial assessment.
B) Real interest rates can be calculated as the difference between nominal rates and the inflation rate.
C) Because market rates are usually in nominal terms,cash flows will usually be in inflation-adjusted terms.
D) Market rates are only meaningful in nominal terms,because an accurate adjustment for inflation is not possible.

Correct Answer:

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