A major difference between real and nominal returns is that:
A)real returns adjust for inflation and nominal returns do not
B)real returns use actual cashflows and nominal returns use expected cashflows
C)real returns adjust for commissions and nominal returns do not
D)real returns show the highest possible return and nominal returns show the lowest possible return

Question

Quizplus · Accepted Answer

Real returns take inflation into account, meaning they are adjusted for changes in purchasing power due to inflation. Nominal returns do not take inflation into account and are just the raw return on an investment.

A Major Difference Between Real and Nominal Returns Is That