If an investment offered a nominal return of 10%, and inflation was 15.8% over the period, what was the real return on this investment? Round your answer to the nearest tenth of a
Percent.
A)+4.8%
B)+0.9%
C)-13.6%
D)-5.0%

Question

Quizplus · Accepted Answer

The real return can be calculated using the formula: Real Return = ((1 + Nominal Return) / (1 + Inflation Rate)) - 1. Plugging in the given values: Real Return = ((1 + 0.10) / (1 + 0.158)) - 1 = (1.10 / 1.158) - 1 ≈ -0.05 or -5.0%.

If an Investment Offered a Nominal Return of 10%, and Inflation