If a Lender Charged a 9 Percent Nominal Interest Rate

question 68

Multiple Choice

If a lender charged a 9 percent nominal interest rate and the expected inflation rate is 4 percent,what is the difference between the real rate the lender received and the real rate the lender expected when actual inflation ended up being 2 percent?

• A) 2 percent
• B) 4 percent
• C) -4 percent
• D) 1 percent
• E) 0 percent

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Definitions:

Ischialgia

Pain along the sciatic nerve usually caused by pressure or damage to the nerve, commonly referred to as sciatica.

Lumbodynia

Pain located in the lumbar region or lower back.

Arthralgia

Pain in a joint, often related to arthritis or other joint conditions.

Ischial

Pertaining to the ischium, which is part of the hip bone.