Suppose That the Nominal Rate of Interest Is 7% and the Inflation

question 8

Multiple Choice

Suppose that the nominal rate of interest is 7% and the inflation rate is 3%. The real rate of interest is _____%.

• A) 3
• B) 4
• C) 10
• D) 7

---

Definitions:

Cease to Exist

To stop existing or to come to an end completely, often used in the context of organizations, entities, or life.

Substantially All

Pertaining to the majority or nearly the complete portion of something, often used in legal contexts concerning asset transfers.

Shareholder Approval

The process by which actions affecting a corporation and its governance must be approved by a majority of its shareholders.

Ordinary Course

Activities that are considered part of the normal, day-to-day operations of a business.