The nominal rate of return on the bonds of Steve's Boats is 8.75%. The real rate of return is 3.4%. What is the rate of inflation?

Name: The nominal rate of return on the bonds of Steve's Boats is 8.75%. The real rate of return is 3.4%. What is the rate of inflation?
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Quizplus · Accepted Answer

The correct answer is A because the rate of inflation is calculated by subtracting the real rate of return from the nominal rate of return. In this case, the rate of inflation is 8.75% - 3.4% = 5.17%.

The Nominal Rate of Return on the Bonds of Steve's