Solved

You Purchase a Certificate of Deposit and Expect an Inflation

Question 14

Multiple Choice

You purchase a certificate of deposit and expect an inflation rate of 1.5% over the next year. Your nominal rate of interest is 2.25%. What is your expected real rate of return?


A) 2.25%
B) 0.75%
C) -0.75%
D) 3.75%

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q9: The table shows consumer price index

Q10: Which of the following correctly shows the

Q11: You open a savings account that pays

Q12: What is Costa Rica's GDP deflator if

Q13: (Table: Muffin Price Index) Use Table:

Q15: The table shows consumer price index

Q16: Each month, Lydia typically purchases 12 sodas,

Q17: If the consumer price index is 148.3

Q18: Consider the following basket of goods: 15

Q19: During periods of high inflation, stores that