Question 18 (1 point) Assume that the inflation rate during the last year was 1.97 percent....

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Answer 1

Answer #1

Real rate of return = (1 + Nominal rate of return) / (1 + Inflation rate) - 1

= (1 + 0.0354) / (1 + 0.0197) - 1

= 1.0154 - 1

= 0.0154 or 1.54%

Real rate of return = 1.54%

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Answer 2

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