The increase you realize in buying power as a result of owning a bond is referred to as the _____ rate of return.
A) inflated
B) realized
C) nominal
D) real
E) risk-free

Question

Quizplus · Accepted Answer

The increase in buying power due to owning a bond is referred to as the real rate of return. This is because it takes inflation into account and measures the actual increase in purchasing power, unlike the nominal rate of return, which only considers the percentage increase in nominal terms. Therefore, option D is the correct answer.

The Increase You Realize in Buying Power as a Result