Calculate the nominal rate if the real rate is 4.25% and the inflation rate is 3%.
A)10.18%
B)9.28%
C)8.83%
D)7.38%

Name: Calculate the nominal rate if the real rate is 4.25% and the inflation rate is 3%. A)10.18% B)9.28% C)8.83% D)7.38%
Brand: Quizplus
Rating: 4.9 (38 reviews)

Question

Quizplus · Accepted Answer

The nominal rate can be calculated using the Fisher equation: nominal rate = real rate + inflation rate. Therefore, nominal rate = 4.25% + 3% = 7.25%. However, there seems to be a slight discrepancy in the provided options, with the closest match being 7.38%.

Calculate the Nominal Rate If the Real Rate Is 4