If You Are Promised a Nominal Return of 12% on a One

question 83

Multiple Choice

If you are promised a nominal return of 12% on a one year investment,and you expect the rate of inflation to be 3%,what real rate do you expect to earn?

• A) 5.48%
• B) 8.74%
• C) 9.00%
• D) 12.00%

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