If a Bond Offers an Investor 11 Percent in Nominal

question 14

Multiple Choice

If a bond offers an investor 11 percent in nominal return during a year in which the rate of inflation was 4 percent, then the investor's real return was:

• A)6.73 percent
• B)7.00 percent
• C)8.75 percent
• D)10.56 percent 1 + real return = 1.11/1.04

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Definitions:

Social Classes

Categories of people within a society who share similar socioeconomic statuses, often determined by factors like wealth, occupation, and education.

Median Weekly Earnings

The middle value of weekly income, dividing the income distribution into two equal groups, half earning more and half earning less.

Employed Outside

Working in a position or job that is located outside of one's primary place of employment or field of expertise.

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