An Investor Can Earn a 6% Nominal Rate of Return

question 40

Multiple Choice

An investor can earn a 6% nominal rate of return but inflation is expected to be 3%.If the individual invests $2,000 per year for 20 years the real future value of their investment is ________.(All investments occur at year end) .

• A) $73,571
• B) $66,334
• C) $53,251
• D) $48,732

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Definitions:

Poisson Distribution

A discrete probability distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space.

Poisson Distribution

A probability distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space if these events occur with a known constant rate and independently of the time since the last event.

Gas Station

A gas station is a facility that sells fuel and engine lubricants for motor vehicles.

Cubic Yard

A unit of volume used typically in the United States for materials such as concrete, measuring 3 feet long by 3 feet wide by 3 feet high.