Multiple Choice
In 2008, Mr. Conservative bought a 1-year Treasury bill that was yielding 1.63%.The average annual rate of inflation in 2008 was 3.85%.In this case:
A) Mr. Conservative earned a nominal return of +3.85% on his T-bill investment.
B) Mr. Conservative earned a real return of -2.22% on his investment.
C) Mr. Conservative earned a real return of +1.63% on his investment.
D) Mr. Conservative earned a nominal return of +2.22% on his investment.
Correct Answer:
Verified
Correct Answer:
Verified
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