Which of the Following Equations Best Explains the Relationships Among

question 31

Multiple Choice

Which of the following equations best explains the relationships among inflation, taxes, interest, and real after-tax returns?

• A)nominal interest rate - Expected inflation rate - Taxes = Real after-tax return
• B)expected inflation rate - Nominal interest rate - Taxes = Real after-tax return
• C)nominal interest rate - Expected inflation rate = Real after-tax return - Taxes
• D)real after-tax return - Expected inflation rate - Taxes = Nominal interest rate