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A real rate of return is defined as a rate that has been adjusted for which...

A real rate of return is defined as a rate that has been adjusted for which one of the following

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A Real Rate of Return is defined as a rate that has been adjusted for Inflation. It is basically the percentage returns earn on an investment. It is calculated after the adjustment of prices.

For example, If you invested $1,000,000 in a stock which has a nominal return of 10% and the inflation rate is 2%, the real rate of return shall be 8%(10% - 2%). In this case, the real return shall be 8%, although it seems like it is 10%, it is not so because inflation has reduced your return by 2%.

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