How is it possible for real rates of return to increase during times when the rate of inflation increases?
A) Inflation increased more than the real return.
B) Nominal returns actually decreased.
C) Nominal returns increased more than inflation.
D) Nominal returns increased less than inflation.

Question

Quizplus · Accepted Answer

Real rates of return can increase if nominal returns increase more than the rate of inflation, as the real return is the nominal return adjusted for inflation.

How Is It Possible for Real Rates of Return to Increase