Difference between countries in the risk-free rates

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Assessing interest rate differentials among countries: In countries experiencing high inflation, the annual interest rate may exceed 50 percent, in other countries such as the United States and many European countries, annual interest rates are typically less than 10 percent. Do you think such a large difference in interest rates is due primarily to the difference between countries in the risk-free rates or in the credit risk premium?

Reference no: EM13771759

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