Economics & AnalysisPregunta 10 de 110
An investor earns a 12% nominal return in a year when inflation is 4%. Using the approximate method, the real return is closest to which of the following?
a.16%
b.3%
c.8%
d.48%
Explicación
The approximate real return is the nominal return minus the inflation rate, or 12% minus 4%, which equals about 8%. Real return adjusts nominal gains for the loss of purchasing power. This distinction matters when evaluating whether an investment truly grows wealth.
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