If You Are Promised a Nominal Return of 12% on a One

question 83

Multiple Choice

If you are promised a nominal return of 12% on a one year investment,and you expect the rate of inflation to be 3%,what real rate do you expect to earn?

• A) 5.48%
• B) 8.74%
• C) 9.00%
• D) 12.00%

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Definitions:

Stereotyping

The act of categorizing individuals or groups into certain characteristics or behaviors without acknowledging individual differences.

Halo Effect

A cognitive bias in which an individual's overall positive or negative impression of a person, brand, or product influences their feelings and thoughts about that entity's specific traits.

Pygmalions

A phenomenon where higher expectations lead to an increase in performance.

Managers

Managers are individuals responsible for planning, leading, organizing, and controlling resources and teams to achieve organizational goals.