Assume that expected rates of inflation over the next 5 years are 4 percent,7 percent,10 percent,8 percent,and 6 percent,respectively.What is the average expected inflation rate over this 5-year period?
A) 6.5%
B) 7.5%
C) 8.0%
D) 6.0%
E) 7.0%

Question

Quizplus · Accepted Answer

The average expected inflation rate over the 5-year period is calculated by adding the expected rates of inflation for each year and then dividing by the number of years. So, (4% + 7% + 10% + 8% + 6%) / 5 = 35% / 5 = 7%.

Assume That Expected Rates of Inflation Over the Next 5