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The Nominal Interest Rate Is 4%,the Inflation Rate Is 1

Question 65

Multiple Choice

The nominal interest rate is 4%,the inflation rate is 1% and the tax rate is 20%.Given U.S.tax laws,how is after-tax real return computed?

A) .03(1-.20)
B) .04(1 -.20)
C) .04(1 - .20) - .01
D) None of the above is correct.

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