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If a Lender Desires to Earn a Real Return of 3

Question 141

Multiple Choice

If a lender desires to earn a real return of 3 percent on a loan and the anticipated rate of inflation is 2 percent,the lender should charge a

A) Real interest rate of 5 percent.
B) Nominal interest rate of 5 percent.
C) Real interest rate of 6 percent.
D) Nominal interest rate of 3 percent.

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