You Want to Earn a Real Rate of Return of 3.64

question 43

Multiple Choice

You want to earn a real rate of return of 3.64 percent at a time when the inflation rate is 2.84 percent.What is the approximate nominal rate which you must earn?

• A)6.48 percent
• B)6.66 percent
• C)6.68 percent
• D)6.74 percent
• E)6.81 percent

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Definitions:

Materialism

The philosophical belief in material objects and physical comfort as paramount, or a societal focus on wealth and consumer goods.

Loose Culture

A culture that has relaxed social norms and allows conformity by members to vary a good deal.

Uncertainty Avoidance

A cultural or organizational characteristic where members prefer structured situations over ambiguity, aiming to minimize the unpredictability of future events.

Ecological Fallacy

The error of making inferences about individuals based on aggregate data for a group.