The increase in purchasing power of an investment is not reflected in its real rate of return.

Question

Quizplus · Accepted Answer

The increase in purchasing power of an investment is actually reflected in its real rate of return because the real rate of return takes into account the effects of inflation. If the nominal rate of return on an investment is higher than the rate of inflation, then the real rate of return will be positive, indicating an increase in purchasing power.

The Increase in Purchasing Power of an Investment Is Not