If the Annual Rate Is 2% and Inflation Is 3

question 34

Multiple Choice

If the annual rate is 2% and inflation is 3%, then the approximate real rate of return is:

• A)5.00%
• B)3.00%
• C)1.00%
• D)- 1.0%
• E)0%

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Definitions:

Standard Normal Distribution

The standard normal distribution is a normal distribution with a mean of 0 and a standard deviation of 1, used in hypothesis testing and probability determination.

Normal Random Variable

A variable that follows a normal distribution, characterized by its bell-shaped curve, where the mean, median, and mode are all equal.

Standard Normal Distribution

A probability distribution that has a mean of zero and a standard deviation of one, used in many areas of statistical analysis.

Symmetrically Distributed

A description of a data distribution where, on a graph, the left and right sides of the distribution are approximately mirror images of each other.