A Major Difference Between Real and Nominal Returns Is That

question 40

Multiple Choice

A major difference between real and nominal returns is that:

• A)real returns adjust for inflation and nominal returns do not
• B)real returns use actual cashflows and nominal returns use expected cashflows
• C)real returns adjust for commissions and nominal returns do not
• D)real returns show the highest possible return and nominal returns show the lowest possible return

---

Definitions:

Satisficing

A decision-making approach that seeks a satisfactory solution rather than an optimal one.

Decision-Critical Criteria

Essential factors or standards considered vital in making a decision.

Pros And Cons

The advantages and disadvantages or positive and negative aspects of a decision, action, or situation.