Suppose that the annual expected rates of inflation over each of the next five years are 5 percent,6 percent,9 percent,13 percent,and 12 percent,respectively.What is the average expected rate of inflation over the 5-year period?
A) 6%
B) 7%
C) 8%
D) 9%
E) 10%

Question

Quizplus · Accepted Answer

To find the average expected rate of inflation over the 5-year period, add the rates for each year and divide by 5: (5% + 6% + 9% + 13% + 12%) / 5 = 45% / 5 = 9%.

Suppose That the Annual Expected Rates of Inflation Over Each