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    Exam 5: Risk, Return, and the Historical Record
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    If the Annual Real Rate of Interest Is 2
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If the Annual Real Rate of Interest Is 2

Question 17

Question 17

Multiple Choice

If the annual real rate of interest is 2.5% and the expected inflation rate is 3.4%, the nominal rate of interest would be approximately


A) 4.9%.
B) 0.9%.
C) -0.9%.
D) 7%.
E) None of the options

Correct Answer:

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