If the Nominal Interest Rate Is 5 Percent and There

question 211

Multiple Choice

If the nominal interest rate is 5 percent and there is a deflation rate of 3 percent,what is the real interest rate?

• A)8 percent
• B)2 percent
• C)15 percent
• D)1.7 percent

---

Definitions:

Segment Margin

The amount of profit or loss generated by a specific division or segment of a company, excluding common costs shared across segments.

Variable Expenses

Expenses that change in proportion with a company's activity level, such as materials and labor directly involved in production.

Traceable Fixed Expenses

Fixed costs that can be directly associated with a specific business segment or project.

Variable Costing

An accounting method that only considers variable costs for product costing and decision-making, excluding fixed costs from the calculations of net profit.