With a Nominal Interest Rate of 4%,an Expected Inflation Rate

question 69

Multiple Choice

With a nominal interest rate of 4%,an expected inflation rate of 1%,and interest income taxed at a rate of 25%,what is the expected real after-tax interest rate?

• A)3%
• B)2%
• C)1%
• D)0%

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Definitions:

Consignment

Goods from a producer to a commission merchant for sale at the best possible price.

Total Gross Pay

The total amount earned by an employee before any deductions or taxes are applied.

Commission

Commission is a fee paid to an agent or employee for transacting a piece of business or performing a service, often a percentage of the sale.

Monthly Salary

A fixed amount of money or compensation paid to an employee by an employer for services rendered during a month.