As long as the inﬂation rate is positive, the real rate of return on a security investment will be ____ the nominal rate of return.
A) Greater than.
B) Equal to.
C) Less than.
D) Greater than or equal to.
E) Unrelated to.

Question

Quizplus · Accepted Answer

The real rate of return is calculated by subtracting the inflation rate from the nominal rate of return. Therefore, as long as the inflation rate is positive, the real rate of return will be lower than the nominal rate of return.

As Long as the Inﬂation Rate Is Positive, the Real