If the Inflation Rate Is 5% and the Real Interest

question 92

Multiple Choice

If the inflation rate is 5% and the real interest rate is 4%, then the nominal interest rate is around

• A)-1%.
• B)1%.
• C)9%.
• D)20%.

---

Definitions:

Days' Sales in Inventory

A financial ratio indicating the average number of days it takes a company to sell its entire inventory in a given period.

Replace Inventory

The process of replenishing stock to ensure sufficient levels of inventory are maintained for operations.

Acquire Inventory

The process of obtaining goods and materials for sale or use in production by a company.

Estimated Ending Inventory

An approximation of the value or quantity of inventory that a company expects to have at the end of a period, calculated using the cost of goods sold formula.