Question

Which of the following correctly identifies the Fisher equation? Multiple Choice r= (1 + R)/(1+1 r=R/ (1+1 1 + r = R/(1+) 1+r
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Answer #1

The correct option is (1+r) = (1+R) / (1+i)

The Fisher equation is a measure of the real interest rate and the nominal interest rate taking into the ffect of the infltation. In the equation mentioned above,

The R = Nominal Rate of Interest

i = Inflation

r = Real rate of retrurn

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