Which one of the following is the rate of return an investor earns on a bond before adjusting for inflation?

Question

Quizplus · Accepted Answer

The nominal rate is the rate of return an investor earns on a bond before adjusting for inflation. It is the rate stated on the bond and includes the coupon rate and any capital gains or losses. The real rate, on the other hand, is the rate of return adjusted for inflation and is calculated by subtracting the inflation rate from the nominal rate. The coupon rate is the interest rate paid on a bond and is used to calculate the coupon payments. Clean and dirty rates refer to bond prices and are not related to the rate of return.

Which One of the Following Is the Rate of Return