You Want to Earn a Real Rate of Return of 4.00

question 98

Multiple Choice

You want to earn a real rate of return of 4.00 percent at a time when the inflation rate is 2.05 percent.What is the approximate nominal rate which you must earn?

• A) 5.75 percent
• B) 5.95 percent
• C) 6.05 percent
• D) 6.15 percent
• E) 6.25 percent

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Definitions:

Budgeting Formulas

Mathematical expressions or equations used in the process of allocating resources and planning for future financial activities.

Food and Supplies

Items required for the preparation and serving of food in various industries, including restaurants and hospitality.

Tenant-Days

A measure used in property management to quantify occupancy, calculated by multiplying the number of tenants by the number of days they occupied a space.

Flexible Budget

A budget that adjusts or scales according to changes in the volume of activity, revenue, or other factors influencing budgeted amounts.