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You Open a Savings Account That Earns a Nominal Interest

Question 116

Multiple Choice

You open a savings account that earns a nominal interest rate of 1.3% interest a year. The current consumer price index is 117. In one year, the consumer price index is expected to go to 120. What is your expected real rate of return?


A) -1.26%
B) -2.56%
C) 2.7%
D) 3%

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