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You Open an Investment Account That Earns a Nominal Interest

Question 130

Multiple Choice

You open an investment account that earns a nominal interest rate of 3.1% per year. The current consumer price index is 205. In one year, the consumer price index is expected to go to 203. What is your expected real rate of return?


A) 3.1%
B) 4.08%
C) 7.12%
D) -0.98%

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