Candas Made an Investment with a 10% Annual Yield

question 58

Multiple Choice

Candas made an investment with a 10% annual yield. However, the real growth rate of her investment was only 8.2%. What was the inflation rate?

• A) 1.66%
• B) 3.35%
• C) 4.27%
• D) 6.12%

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Definitions:

Authorized Stock

The amount of stock that a corporation is authorized to sell as indicated in its charter.

Corporate Charter

A legal document issued by a governmental authority that establishes a corporation and outlines its rights and obligations.

Initial Capital

The amount of money used to start a business or investment.

Owners' Equity

The residual interest in the assets of an entity after deducting liabilities, representing the ownership interest of shareholders or owners.