Exhibit 32 The Annual Rate of Inflation Is 2

question 69

Multiple Choice

Exhibit 3.2.
Use the Information Below for the Following Problem(S)
                                               Real Retums
$\begin{array}{lc}\text { Investment } & \text { Real Returns } \\\hline \text { Large company stock } & \text { Real Annual Return } \\\text { Small capitalization stock } & 6.50 \% \\\text { Long-term corporate bonds } & 8.60 \% \\\text { Long-term government bonds } & 3.60 \% \\\text { U.S. Treasury bills } & 2.80 \% \\\text { 1.03\% }\end{array}$

The annual rate of inflation is 2.5%
-Refer to Exhibit 3.2.What is the small capitalization stock nominal return?

• A) 3.56%
• B) 5.37%
• C) 6.19%
• D) 9.16%
• E) 11.32%

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Definitions:

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The mental process of deriving conclusions, judgments, or inferences from facts or premises, often involving logical thought.

Feeling

An emotional state or reaction to stimuli, often subjective and not always based on fact.

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Acting in a manner according to certain standards, rules, or expectations in social contexts.

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The first stage of moral development in Piaget’s theory, occurring from 4 to 7 years of age. Justice and rules are conceived of as unchangeable properties of the world, beyond the control of people.