Given a Nominal Interest Rate of 5 Percent,in Which of the Following

Multiple Choice

Given a nominal interest rate of 5 percent,in which of the following cases would you earn the highest after-tax real rate of interest?

A) Inflation is 3 percent;the tax rate is 15 percent.
B) Inflation is 2 percent;the tax rate is 40 percent.
C) Inflation is 1 percent;the tax rate is 50 percent.
D) The after-tax real interest rate is the same for all of the above.