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Assume you desire a real rate of return of 4 percent on an investment and you expect the annual average inflation rate to be 3.2
Assume you desire a real rate of return of 4 percent on an investment and you expect the annual average inflation rate to be 3.2 percent. What should the nominal interest rate be on this investment?
1. | 8 percent | |
2. | 3.0 percent | |
3. | 30 percent | |
4. | 7.2 percent |
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