Last Year,a Bond Yielded a Nominal Return of 7

Multiple Choice

Last year,a bond yielded a nominal return of 7.37 percent while inflation averaged 3.26 percent.What was the real rate of return?

A) 3.42 percent
B) 3.27 percent
C) 3.98 percent
D) 3.71 percent
E) 3.86 percent