Say you own an asset that had a total return last year of 16 percent. If...

Say you own an asset that had a total return last year of 16 percent. If the inflation rate last year was 5.5 percent, what was your real return? Multiple Choice • 9.85% • 9.95% • -9.05% • 10.05% • 10.15%

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Expert Solution

(1+nominal return)=(1+real return)*(1+inflation rate)

real return =(1+16%)/(1+5.5%)-1

real return =9.95%

jeff jeffy answered 2 years ago

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