The Expected Real Return to Savers Equals

question 37

Multiple Choice

The expected real return to savers equals

• A)expected inflation less the nominal return.
• B)expected inflation plus the nominal return.
• C)the nominal return minus expected inflation.
• D)the nominal return divided by expected inflation.

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Definitions:

Cash Flow Hedge

A strategy used by companies to manage the risk associated with fluctuation in cash flow due to changes in foreign exchange rates, interest rates, or commodity prices.

Forward Contract

A contractual agreement to buy or sell a particular commodity or financial instrument at a pre-determined price at a future date.

Spot Rates

The existing market value at which one can buy or sell a currency for instant delivery.

Selling Price

The set amount of money for which a product or service is sold to customers.