Table 12.1
Expected Real Rates of Interest for Five Countries

Source: Trading Economics, September, 2010
-Refer to Table 12.1. Assuming the inflation rate forecast to be accurate, which nation would pay the highest nominal rate of return?
A) South Africa
B) Australia
C) Brazil
D) the United States

Question

Table 12.1
Expected Real Rates of Interest for Five Countries
  
Source: Trading Economics, September, 2010
-Refer to Table 12.1. Assuming the inflation rate forecast to be accurate, which nation would pay the highest nominal rate of return?
A) South Africa 
B) Australia 
C) Brazil 
D) the United States

Quizplus · Accepted Answer

Brazil would pay the highest nominal rate of return if it has the highest inflation rate forecast, as nominal rates typically include the real rate of return plus the inflation rate.

Table 12.1 Expected Real Rates of Interest for Five Countries