Which of the following statements is most correct?

Question options:

	The nominal rate of interest is defined as the sum of the nominal risk-free rate of return and the expected inflation rate.
	If the Federal Reserve tightens the money supply, short-term interest rates will increase, and short-term rates will probably rise more than long-term rates.
	Long-term interest rates reflect expectations about future inflation. Inflation has varied significantly from year to year during the last 10 years, and as a result, long-term rates have fluctuated more than short-term rates.
	All of the above statements are correct