Bottled Dri Which of the following statements in NOT true? A B C D The nominal risk-free rate is composed of two components: the real risk-free rate and adjustment for the average inflation rate that is expected during the life of the investment. The real risk-free rate of interest is an economic term defined as the interest rate that would exist on a security with a guaranteed payoff. The real risk-free rate depends especially on the rate of return borrowers are willing to pay to borrow funds and on investors' time preferences for current versus future consumption. If the term risk-free rate is used without either the term real or the term nominal, people generally mean the quoted (nominal) rate