Factors Affecting Real Risk-Free Rate in Different Countries

The Factors Affecting Real Risk-Free Rate in Different Countries

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Question

The real Risk-Free Rate in different countries will vary widely due to which of the following factors?

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A. B. C. D.

A

The real risk free rate is dependent on the growth rate, because typically an investor will want to have a return larger than the projected growth rate of an economy. The growth rate of an economy is affected by variables like the growth rates of the labor force, the work hours and productivity.