what nominal return was recieved by an investor when inflation averaged 3.46% and the real rate...

Question

Question

what nominal return was recieved by an investor when inflation averaged 3.46% and the real rate of return was 2.5%? a) 0.96% b)5.96% c) 6.05% d)5.47%

business finance

Answer 1

Answer #1

Normal rate can be compuertd as follows

(1+Nromal Rate)=(1+Real Rate)(1+Inflation rate)

(1+Normal Rate)=(1+0.025)(1+0.0346)

Normal rate =6.05%

Answer 2

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