If the Nominal Interest Rate Is 10% and the Rate

question 27

Multiple Choice

If the nominal interest rate is 10% and the rate of inflation is 7%, what is the real rate of interest?

• A)2.8%
• B)7.0%
• C)10.3%
• D)3.0%

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Definitions:

Percentage

A portion of a whole expressed as a fraction of 100, used in quantifying proportions and ratios.

Descriptive Statistics

Statistical methods that summarize and organize data collected from a sample or population, including measures such as mean, median, and standard deviation.

Numerical Indexes

Measures or indicators that are expressed as numbers, often used to compare and analyze data.

Mean

The arithmetic average of a set of values, calculated by summing the values and then dividing by the number of values.