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The Costaguanan stock market provided a rate of return of 95%. The inflation rate in Costaguana during the year was 80%. In Ruritania, in contrast,
The Costaguanan stock market provided a rate of return of 95%. The inflation rate in Costaguana during the year was 80%. In Ruritania, in contrast, the stock market return was only 12%, but the inflation rate was only 2%.
a. Calculate the real rate of return for both the Costaguana and the Ruritania stock markets. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
b. Which countrys stock market provided the higher real rate of return?
multiple choice
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Costaguana
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Ruritania
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