The inflation rate over the past year was 2.8 percent. If an investment had a real...
The inflation rate over the past year was 2.8 percent. If an investment had a real return of 6.5 percent, what was the nominal return on the investment?
Homework Answers
Nominal return=(1+real rate)(1+inflation rate)-1
=(1+0.065)(1+0.028)-1
=(1.065*1.028)-1
=9.482%
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