How Much Would an Investor Need to Receive in Nominal

question 61

Multiple Choice

How much would an investor need to receive in nominal return if he desires a real return of 4% and the rate of inflation is 5%?

• A) 4.20%
• B) 8.64%
• C) 9.00%
• D)9.20%

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Definitions:

Marginal Tax Rate

is the rate at which the next dollar of income will be taxed, reflecting the percentage of additional income that is paid in tax.

Local Governments

The administrative bodies that govern smaller regions within a country, often responsible for local policies and services.

Expenditure Item

An item or category within a budget or financial statement representing money spent on goods, services, or other expenses.

Average Tax Rate

The proportion of the total income that is paid in taxes, calculated by dividing total tax amount by total income.