Use the following statements to answer this question: I. The real rate of return on an investment is the nominal return minus the rate of inflation.
II) The real rate of return on an investment cannot be negative.
A) I and II are true.
B) I is true and II is false.
C) II is true and I is false.
D) I and II are false.

Question

Quizplus · Accepted Answer

I is true because the real rate of return is indeed calculated by subtracting the inflation rate from the nominal return. II is false because the real rate of return can be negative if the rate of inflation is higher than the nominal return.

Use the Following Statements to Answer This Question: I