What Nominal Return Was Received by an Investor When Inflation

question 110

Multiple Choice

What nominal return was received by an investor when inflation averaged 8.0% and the real rate of return was a negative 2.5%?

• A) 5.30%
• B) 5.75%
• C) 6.50%
• D) 10.77%

---

Definitions:

Property, Plant, And Equipment

Tangible long-term assets used in the operation of a business, such as buildings and machinery, not intended for resale.

Component Percentages

Financial analysis technique that represents each financial statement item as a percentage of a base figure for easier comparison.

Financial Statements

Formal records of the financial activities and position of a business, individual, or other entity, including the balance sheet, income statement, and cash flow statement.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations using its current assets.