If the real return on U.S. Treasury bills is 14 percent while the rate of expected inflation is 8 percent, then what should nominal rate of return be? (Round final percentage answer to decimal places.)

Question

Quizplus · Accepted Answer

The nominal rate of return can be found by adding the real return to the rate of inflation.

Nominal rate of return = real return + rate of inflation

Nominal rate of return = 14% + 8% = 22%

Therefore, the nominal rate of return should be 22%, which is closest to choice (C) 23.12% when rounded to two decimal places.

If the Real Return on U