If the Nominal Interest Rate Is 5

question 78

Multiple Choice

If the nominal interest rate is 5.2 percent and expected inflation rate is 2 percent, the real interest rate equals

• A)7.2 percent.
• B)3.2 percent.
• C)5.0 percent.
• D)10.4 percent.
• E)none of the above

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Definitions:

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.

Other Assets

Non-current assets that do not fit into the standard categories of fixed assets, investments, or intangible assets, usually including long-term receivables and deferred charges.

Remaining Assets

Assets that are left over after certain liabilities or expenses have been deducted.