The nominal interest rate is 7 and the expected inflation rate is ...

[Tazate]

The nominal interest rate is 7 and the expected inflation rate is 2. Based on the Fisher effect, the
  real rate of interest is
 
  A) 6.86. B) 5.0. C) 4.9. D) 5.1.

Question 2

Which of the following statements is (are) true concerning the self-insured retention (SIR) under a commercial umbrella liability policy?
 
  I. The SIR applies to claims covered by the umbrella policy but not by any underlying insurance.
  II. The SIR only applies to those claims for which the underlying policy has paid first, and the umbrella policy is paying on an excess basis.
  A) I only
  B) II only
  C) Both I and II
  D) Neither I nor II

[chreslie]

Answer to Question 1

C

Answer to Question 2

Answer: A