If an Investment Offered a Nominal Return of 10%, and Inflation

question 33

Multiple Choice

If an investment offered a nominal return of 10%, and inflation was 15.8% over the period, what was the real return on this investment? Round your answer to the nearest tenth of a
Percent.

• A)+4.8%
• B)+0.9%
• C)-13.6%
• D)-5.0%

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Definitions:

Accounting Principle

Fundamental guidelines or rules that form the basis for financial accounting and reporting practices, aimed at ensuring consistency and comparability.

Comparative Financial Statements

Financial reports that show the financial position, performance, and cash flows of a company across different periods side by side for comparison.

Accounting Changes

Alterations or updates made to accounting methods, estimates, or reporting entity, which can impact the financial statements of a business.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, including the balance sheet and income statement.