What Nominal Annual Return Is Required on an Investment in Order

question 22

Multiple Choice

What nominal annual return is required on an investment in order that an investor experiences a 12 percent gain in purchasing power? Assume inflation to be 4 percent.

• A)7.69 percent
• B)9.29 percent
• C)12.00 percent
• D)16.48 percent

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Definitions:

College Professorship

A faculty position at a college or university, often including roles such as teaching, research, and administrative responsibilities.

Mutually Exclusive

A statistical term describing events that cannot occur at the same time, indicating no overlap in outcomes.

Joint Probability

The likelihood of two events happening at the same time.

Conditional Probability

The probability associated with an event under the condition that a separate event has already transpired.