Nico Nelson, a Management Trainee at a Large New York-Based

question 209

Multiple Choice

Nico Nelson, a management trainee at a large New York-based bank, is trying to estimate the real rate of return expected by investors. He notes that the 3-month T-bill currently yields 3 percent and has decided to use the consumer price index as a proxy for expected inflation. What is the estimated real rate of interest if the CPI is currently 2 percent?

• A) 5%
• B) 1%
• C) 3%
• D) 2%

---

Definitions:

Transaction

The action of conducting business or financial exchanges between two or more parties.

Media Gatekeepers

Individuals or entities, such as editors or producers, who control the flow of information and decide which stories are published or broadcasted.

Paid Media

A form of marketing that involves paying for space to promote a product, service, or cause, such as advertising in newspapers, online, or on television.

Synonymous Terms

Refers to words or phrases that share the same, or very similar, meanings in certain contexts.