Everything else held constant,an increase in expected inflation,lowers the expected return on ________ compared to ________ assets.
A)bonds;financial
B)bonds;real
C)real estate;financial
D)real estate;real

Question

Quizplus · Accepted Answer

An increase in expected inflation lowers the expected return on bonds compared to real assets because the nominal returns on bonds are fixed, and higher inflation erodes the real value of these returns. In contrast, real assets, like property or commodities, often see their values rise with inflation, preserving or enhancing their real returns.

Everything Else Held Constant,an Increase in Expected Inflation,lowers the Expected