Any lender about to make a loan wishes to know the real rate of interest; i.e., the contractual rate of interest less the rate of inflation. But what rate of inflation to use, past or expected Past inflation is the better choice, because we have specific firm figures for it so that the real rate of interest will also emerge as a specific figure.
Which of the following, if true, is the pest point that an opponent of the position above might make in arguing that the rate of expected inflation is the proper figure to use
A．Since the contractual interest is future income to a prospective lender, it is more appropriate to adjust that income in terms of inflation expected for the future.
B．Since estimating the rate of expected inflation presupposes careful economic analysis, lenders might derive coincidental benefits from doing such an estimate.
C．The rate of expected inflation will differ little from the rate of past inflation when inflation is steady.
D．No official rate of past inflation is computed for any period shorter than a month.
E．(E) The official rate of past inflation is a figure that depends on what commodities, in what proportions, determine the official price index.
