To Estimate the Real Return for the Year, One Would

question 6

Multiple Choice

To estimate the real return for the year, one would take

• A) nominal return + inflation.
• B) nominal return/inflation.
• C) inflation/nominal return.
• D) nominal return - inflation.

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Definitions:

Passive Indexes

Investment funds designed to mimic the composition and performance of a designated market index, thereby minimizing management decisions and costs.

ETFs

Exchange-Traded Funds, investment funds that are traded on stock exchanges, much like stocks, but hold assets such as stocks, commodities, or bonds.

Front-end Load

A fee paid when purchasing shares of a mutual fund or other investment, typically used to cover commission expenses.

Expense Ratio

A measure depicting the percentage of a fund's assets that are used for administrative and other operating expenses, directly affecting investors' returns.