What Nominal Annual Return Is Required on an Investment in Order

question 36

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 (1 + real rate) x (1 + inflation rate) = 1 + nominal rate

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Definitions:

Sodium

A chemical element (Na) that is a highly reactive metal and an essential nutrient for human health, particularly in nerve function and fluid balance.

Action Potentials

Short-lasting events in which the electrical membrane potential of a cell rapidly rises and falls.

Terminal Buttons

The small knobs at the end of an axon that release chemicals into the synapse to transmit signals to other neurons.

Glial Cells

Glial cells, also known as glia, are supportive cells in the nervous system that do not conduct nerve impulses but are critical for the support, nourishment, and protection of neurons.