Assume one investor bought a 10-year inflation-protected bond with a fixed annual real rate of 1.5% and another investor bought a 10-year bond without inflation protection with a nominal annual return of 4.2%.If inflation over the 10-year period averaged 2 %, which investor earned a higher real return?
A)The investor who purchased the inflation protected bond.
B)The investor who purchased the bond without inflation protection.
C)Both investors earned the same real return.
D)Neither investor earned a positive real return.

Question

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The Answer of Assume one investor bought a 10-year inflation-protected bond with a fixed annual real rate of 1.5% and another investor bought a 10-year bond without inflation protection with a nominal annual return of 4.2%.If inflation over the 10-year period averaged 2 %, which investor earned a higher real return?
A)The investor who purchased the inflation protected bond.
B)The investor who purchased the bond without inflation protection.
C)Both investors earned the same real return.
D)Neither investor earned a positive real return.

Assume One Investor Bought a 10-Year Inflation-Protected Bond with a Fixed