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Which Formula Computes the Actual Real Rate of Return on an Investment

Question 63

Multiple Choice

Which formula computes the actual real rate of return on an investment?


A) C/FV
B) C/PV
C) r = (1 + R) - (1 + h) - 1
D) r = (1 + R) /(1 + h) - 1
E) R = (1 + r) × (1 + h) - 1

Correct Answer:

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