You are an excellent investor and have averaged a 12% rate of return over the last...
You are an excellent investor and have averaged a 12% rate of return over the last 20 years. Over the same time period, inflation has averaged 3.2%. What is the real rate of return you have earned on your investments?
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Homework Answers
According to Fischer equation
Nominal interest rate - inflation=real interest rate
.12-.032= .088
8.8% real interest rate
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