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If a Bond Offers an Investor 11 Percent in Nominal

Question 14

Multiple Choice

If a bond offers an investor 11 percent in nominal return during a year in which the rate of inflation was 4 percent, then the investor's real return was:


A) 6.73 percent
B) 7.00 percent
C) 8.75 percent
D) 10.56 percent 1 + real return = 1.11/1.04

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