The Actual Real Rate of Return on an Investment Will

question 48

Multiple Choice

The actual real rate of return on an investment will be positive as long as the:

• A) nominal return is positive.
• B) inflation rate is positive.
• C) nominal return exceeds the inflation rate.
• D) inflation rate exceeds the real return.

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Definitions:

Income Statement

A financial statement that shows a company's revenues, expenses, and profit or loss over a specific period of time.

Cash Basis

An accounting method where revenues and expenses are recognized when cash is received or paid, not when they are incurred.

Accounts Receivable

Receivables from clients for goods delivered or services performed by a company, which have not yet been paid for.

Income Statement

A financial statement that shows a company's revenues, expenses, and profits over a specific period.