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    Investments Study Set 3
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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 2

Question 2

Multiple Choice

If the annual real rate of interest is 2.5%, and the expected inflation rate is 3.7%, the nominal rate of interest would be approximately


A) 3.7%.
B) 6.2%.
C) 2.5%.
D) -1.2%.

Correct Answer:

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