If the Nominal Interest Rate Is 6% and the Inflation

question 290

Multiple Choice

If the nominal interest rate is 6% and the inflation rate is 9%, then the real interest rate is

• A)-3%.
• B)3%.
• C)6.67%.
• D)15%.
• E) 25%.

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Definitions:

Tax Bracket

The range of incomes taxed at a specified rate by the government, part of a progressive tax system where tax rates increase with income.

Corporate Bond

A debt security issued by a corporation to raise capital, obligating the issuer to pay interest and repay the principal at a specified date.

Investment Strategy

An investor's plan of distributing assets among various investments aimed at achieving a specific financial goal.

Dividends

Payments made by a corporation to its shareholder members from the company's earnings.