What Is the Minimum Nominal Rate of Return That You

question 24

Multiple Choice

What is the minimum nominal rate of return that you should accept if you require a 4% real rate of return and the rate of inflation is expected to average 3.5% during the investment period?

• A) 7.36%
• B) 7.50%
• C) 7.64%
• D) 8.01%

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Definitions:

Supply

The sum of a product or service that can be bought at a specific price.

Land

The surface of the earth and its natural resources, considered a fundamental factor of production in economics.

Usury Laws

Regulations that set the maximum interest rate that can be charged on loans.

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, paid to the lender for the use of their funds.