Discuss the two major factors that determine the market nominal risk-free rate (NRFR). Explain which of these factors would be more volatile over the business cycle. Step-by-step solution 100% (3...

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Extracted text: Discuss the two major factors that determine the market nominal risk-free rate (NRFR). Explain which of these factors would be more volatile over the business cycle. Step-by-step solution 100% (3 ratings) for this solution Step 1 of 3 Risk-free rate is the rate of return with no risk. Nominal rate of return is return that is adjusted for rate of inflation and real rate of return.