Returns that have been adjusted for inflation are called:
A) Nominal returns
B) Holding period returns
C) Total dollar returns
D) Effective returns
E) Real returns

Question

Quizplus · Accepted Answer

Returns that have been adjusted for inflation are called real returns. Real returns are important in evaluating an investment's true value and purchasing power over time. Nominal returns (A) are actual returns earned by an investment, but do not account for inflation. Holding period returns (B) are the returns earned over a specific holding period. Total dollar returns (C) are the total amount of money earned or lost on an investment, without adjusting for inflation. Effective returns (D) are a measure of an investment's overall return, but do not account for inflation.

Returns That Have Been Adjusted for Inflation Are Called