A fixed interest rate of _____% with _____% inflation will yield the highest rate of return for a lender.
A) 8; 1
B) 11; 5
C) 12; 7
D) 19; 15

Question

Quizplus · Accepted Answer

The real rate of return for the lender is highest when the difference between the interest rate and inflation is greatest. In option A, this difference is 7% (8% - 1%), which is higher than the differences in the other options.

A Fixed Interest Rate of _____% with _____% Inflation Will

A Fixed Interest Rate of _% with _% Inflation Will