If the Real Rate of Return Is 5 Percent and the Inflation

question 141

Multiple Choice

If the real rate of return is 5 percent and the inflation rate is 2 percent, the nominal interest rate is:

• A) 7 percent.
• B) 3 percent.
• C) −3 percent.
• D) −7 percent.

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Definitions:

Intimate

Characterized by a close personal association or familiarity, often relating to personal or private matters.

Personal

Relating to or affecting a particular individual directly, distinct from others.

Social

Relating to society or its organization, or the interactions and relationships between individuals within a community.

Public

The general population or community at large, often referred to in the context of public opinion or public spaces.