If the Inflation Rate Is 10 Percent and the Real

question 64

Multiple Choice

If the inflation rate is 10 percent and the real interest rate is 12 percent, the nominal interest rate is

• A)2 percent.
• B)zero percent.
• C)10 percent.
• D)22 percent.

---

Definitions:

Management Buyouts

A form of acquisition where a company's existing managers acquire a large part or all of the company, often with the help of external financiers.

Short-Form Merger

A type of merger that occurs when a parent company absorbs a subsidiary without needing approval from the subsidiary's shareholders.

Parent-Sub Merger

is a type of corporate merger where the parent company merges with its subsidiary, resulting in the subsidiary becoming part of the parent company.

Subsidiary's Stock

Shares representing ownership in a company that is owned or controlled by another entity, often referred to as the parent company.