What nominal return was received by an investor when inflation averaged 8.0 percent and the real rate of return was a negative 2.5 percent?
A)5.30 percent
B)5.36 percent
C)6.50 percent
D)10.77 percent

Question

Quizplus · Accepted Answer

The correct answer is A.The nominal return is the real return plus the inflation rate. So, if the real return is -2.5% and the inflation rate is 8%, the nominal return is -2.5% + 8% = 5.5%.

What Nominal Return Was Received by an Investor When Inflation