Which situation would you want to borrow money?

	The nominal interest rate is 5% and the expected inflation rate is 1%.
	The nominal interest rate is 15% and the expected inflation rate is 10%
	The nominal interest rate is 10% and the expected inflation rate is 8%.
	The nominal interest rate is 6% and the expected inflation rate is 3.5%

We consider 91-day U.S. Treasury Bills as a store of value because you are able to use them to shop at your local 7-Eleven store.

	True
	False

The following is an important factor in formulating your bond portfolio strategy

	Evaluation of the credit quality of the issuers of the bonds.
	Your income tax bracket.
	Interest rate forecast.
	All of the answers.

The real rate of interest is

	is equal to the rate on the United States Treasury Bills.
	the default-risk free rate.
	is the same as the nominal rate of interest.
	the rate of interest that would prevail in prices were not expected to change.

Despite the debt ceiling debacle recently, United States Treasury securities are free of default risk.

	True
	False