If the Nominal Interest Rate Is 8 Percent and the Real

question 45

Multiple Choice

If the nominal interest rate is 8 percent and the real interest rate is 5.5 percent,then the inflation rate is

• A)-2.5 percent.
• B)0.45 percent.
• C)2.5 percent.
• D)13.5 percent.

---

Definitions:

Resold

Refers to the action of selling something that has already been bought; involves the subsequent or secondhand sale of an item or property.

Securities Act of 1934

The Securities Act of 1934 is a U.S. federal law that primarily governs the trading of securities after the initial sale, establishing rules for transactions, the disclosure process, and the prevention of fraud.

SEC Rule 144

A regulation set by the Securities and Exchange Commission that outlines conditions under which restricted, unregistered, and control securities can be sold or offered for sale.

1934 Act

The Securities Exchange Act of 1934, which governs the trading of securities in the United States, including the secondary market.