The increase you realize in buying power as a result of owning an investment is referred to as the ________ rate of return.
A)inflated
B)realized
C)nominal
D)real
E)risk-free

Question

Quizplus · Accepted Answer

The increase in buying power that takes into consideration the effects of inflation is known as the real rate of return. Nominal rate of return only considers the nominal or stated return on an investment, whereas the real rate of return adjusts for the purchasing power loss due to inflation. Inflated and realized rates of return are not commonly used terms in finance, and risk-free rate of return refers to the return on a completely risk-free investment.

The Increase You Realize in Buying Power as a Result