Say you own an asset that had a total return last year of 11.65 percent. If...

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Say you own an asset that had a total return last year of 11.65 percent. If the inflation rate last year was 3.4 percent, what was your real return?

Answer 1

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Answer #1

Real Rate of Return $=\frac{1+\text { nominal rate }}{1+\text { inflation rate }}-1$

real return $=1+11.65 \% / 1+3.4 \%-1$

$=7.978 \%$

Answer 2

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