As long as the inflation rate is positive,the real rate of return on a security will be ____ the nominal rate of return.

Question

Quizplus · Accepted Answer

The real rate of return is the nominal rate of return minus the inflation rate. Therefore, as long as the inflation rate is positive, the real rate of return will be lower than the nominal rate of return. Thus, the best choice is C, which indicates that the real rate of return will be less than the nominal rate of return.

As Long as the Inflation Rate Is Positive,the Real Rate