Answer: nominal interest rates only.

**Explanation:** Currency risk differences across countries are reflected in **nominal interest rates only**. **Key Points:** - **Nominal interest rates** = Real interest rates + Expected inflation + Currency risk premium - **Real interest rates** should be equal across countries if capital is mobile (real interest rate parity) - Currency risk premium is the additional compensation investors require for holding assets denominated in foreign currencies - This currency risk premium gets incorporated into nominal interest rates, not real interest rates If real interest rate parity holds, real interest rates are equal across countries, and any differences in nominal rates reflect differences in expected inflation and currency risk premiums.

Author: LeetQuiz Editorial Team