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Use the approximation. For an investor to gain 5% in purchasing power during a period when prices increase by 2%, the nominal rate would need
Use the approximation. For an investor to gain 5% in purchasing power during a period when prices increase by 2%, the nominal rate would need to be (approximately): 2% 3% 5% 7% Use the approximation. If the nominal rate of return on an investment is 5%, and inflation is 3%, what is the investor's increase in purchasing power (real rate)? 2% 3% 5% 7%
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