If over the course of a year the inflation rate was about 3.24%, and short-term government bonds offered a rate of 2.9%, which of the following statement is correct?
A) The real interest rate for investors in these bonds was greater than the rate of inflation.
B) Investors in these bonds were able to buy less at the end of the year than they could have purchased at the start of the year.
C) The nominal interest rate offered by these bonds gave the true increase in purchasing power that resulted from investing in these bonds.
D) The purchasing power of investors in these bonds grew over the course of the year.
Correct Answer:
Verified
Q6: Inflation is calculated as the rate of
Q7: Five years ago you took out a
Q8: A small foundry agrees to pay $250,000
Q9: The effective annual rate (EAR) for a
Q10: You are considering purchasing a new truck
Q12: Which of the following reasons for considering
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents