Use the Information Below to Answer the Following Question(s)

question 119

Multiple Choice

Use the information below to answer the following question(s) .
Barry operates a shop in a resort in an area known for its high inflation rate. The inflation rate for the last few years has been averaging 3 percent a month. His long-term real rate of return is 12 percent, or 1 percent a month. On April 1 he anticipates that real dollar sales during the summer will be as follows:

-What is the nominal rate of return on a monthly basis for Barry's shop during the summer?

• A) 0.0400
• B) 0.0403
• C) 0.0430
• D) 0.0150
• E) 0.0100

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