If Inflation Is Anticipated to Be 10 Percent During the Next

question 8

Multiple Choice

If inflation is anticipated to be 10 percent during the next year while a nominal rate of 20 percent will be earned on U.S. Treasury bills, then what is the accurate real rate of return on these securities?(Round final percentage answer to decimal places.)

• A) 20.05%
• B) 10.01%
• C) 9.09%
• D) None of the above.

---

Definitions:

Non-standard Work

Employment that deviates from traditional norms in terms of hours, permanency, or contract conditions, often lacking in job security and benefits.

Divergent Thinking

A thought process or method used to generate creative ideas by exploring many possible solutions.

Convergent Thinking

A cognitive process in which the focus is directed at arriving at a single, correct solution to a problem.

Optimality Theory

A conceptual framework in linguistics that hypothesizes that observable forms of language arise from the interaction between conflicting constraints.