According to the International Fisher Effect,if the Real Rate of Interest

question 43

Multiple Choice

According to the International Fisher Effect,if the real rate of interest in a country is 5 percent and the annual inflation is expected to be 10 percent,the nominal interest rate will be

• A) 5 percent.
• B) 10 percent.
• C) 12.5 percent.
• D) 15 percent.
• E) 20 percent.

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Definitions:

Bootstrap

A statistical method that involves resampling with replacement from a dataset to assess variability in a statistic.

Permutation

A permutation is an arrangement of all or part of a set of objects, with regard to the order of the arrangement.

Income

Financial gain accumulated over a period, such as wages from employment, profits from investments, or returns from assets.

Bootstrap Confidence Interval

A method for estimating the confidence interval of a parameter by resampling with replacement from an original dataset and calculating the interval from the bootstrap samples.