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All questions of Nominal rate of Return for Commerce Exam
What happens to the nominal rate of return if inflation increases?- a)It decreases
- b)It increases
- c)It remains unchanged
- d)It depends on other market factors
Correct answer is option 'B'. Can you explain this answer?
What happens to the nominal rate of return if inflation increases?
a)
It decreases
b)
It increases
c)
It remains unchanged
d)
It depends on other market factors
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Pj Commerce Academy answered |
When inflation increases, the nominal rate of return typically increases as well, assuming other factors remain constant. This is because investors may demand higher nominal returns to compensate for the eroding purchasing power caused by inflation.
Which of the following is NOT a component of nominal rate of return?- a)Inflation rate
- b)Risk premium
- c)Real rate of return
- d)Expected return
Correct answer is option 'C'. Can you explain this answer?
Which of the following is NOT a component of nominal rate of return?
a)
Inflation rate
b)
Risk premium
c)
Real rate of return
d)
Expected return
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Nipun Tuteja answered |
The nominal rate of return includes components such as the real rate of return, inflation rate, and any other premiums or returns associated with the investment, such as risk premium or expected return. The real rate of return is a separate component used to calculate the nominal rate of return.
What does the nominal rate of return represent?- a)Rate of return adjusted for inflation
- b)Rate of return before adjusting for inflation
- c)Rate of return after adjusting for taxes
- d)Rate of return on risk-free investments
Correct answer is option 'B'. Can you explain this answer?
What does the nominal rate of return represent?
a)
Rate of return adjusted for inflation
b)
Rate of return before adjusting for inflation
c)
Rate of return after adjusting for taxes
d)
Rate of return on risk-free investments
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Pj Commerce Academy answered |
The nominal rate of return represents the rate of return earned on an investment before adjusting for the effects of inflation.
If the nominal rate of return is 10% and the real rate of return is 6%, what is the inflation rate?- a)4%
- b)16%
- c)6%
- d)10%
Correct answer is option 'A'. Can you explain this answer?
If the nominal rate of return is 10% and the real rate of return is 6%, what is the inflation rate?
a)
4%
b)
16%
c)
6%
d)
10%
|
Learning Educators answered |
Inflation rate = Nominal rate of return - Real rate of return = 10% - 6% = 4%
A bond offers a nominal rate of return of 5%, and the real rate of return is 2%. What is the inflation rate?- a)7%
- b)3%
- c)5%
- d)2%
Correct answer is option 'A'. Can you explain this answer?
A bond offers a nominal rate of return of 5%, and the real rate of return is 2%. What is the inflation rate?
a)
7%
b)
3%
c)
5%
d)
2%
|
Curiosity Classes answered |
Inflation rate = Nominal rate of return - Real rate of return = 5% - 2% = 7%
If an investment earns a nominal rate of return of 9% and the inflation rate is 3%, what is the real rate of return?- a)12%
- b)6%
- c)9%
- d)3%
Correct answer is option 'B'. Can you explain this answer?
If an investment earns a nominal rate of return of 9% and the inflation rate is 3%, what is the real rate of return?
a)
12%
b)
6%
c)
9%
d)
3%
|
KP Classes answered |
Real rate of return = Nominal rate of return - Inflation rate = 9% - 3% = 6%
If the nominal rate of return is 8% and the inflation rate is 4%, what is the expected real rate of return?- a)12%
- b)4%
- c)8%
- d)2%
Correct answer is option 'B'. Can you explain this answer?
If the nominal rate of return is 8% and the inflation rate is 4%, what is the expected real rate of return?
a)
12%
b)
4%
c)
8%
d)
2%
|
|
Nipun Tuteja answered |
Real rate of return = Nominal rate of return - Inflation rate = 8% - 4% = 4%
If the nominal rate of return is 11% and the real rate of return is 5%, what is the inflation rate?- a)6%
- b)16%
- c)5%
- d)11%
Correct answer is option 'A'. Can you explain this answer?
If the nominal rate of return is 11% and the real rate of return is 5%, what is the inflation rate?
a)
6%
b)
16%
c)
5%
d)
11%
|
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Curiosity Classes answered |
Inflation rate = Nominal rate of return - Real rate of return = 11% - 5% = 6%
A bond offers a nominal rate of return of 7% and the expected inflation rate is 2%. What is the real rate of return?- a)5%
- b)7%
- c)2%
- d)9%
Correct answer is option 'A'. Can you explain this answer?
A bond offers a nominal rate of return of 7% and the expected inflation rate is 2%. What is the real rate of return?
a)
5%
b)
7%
c)
2%
d)
9%
|
|
Curiosity Classes answered |
Real rate of return = Nominal rate of return - Inflation rate = 7% - 2% = 5%
An investment earns a nominal rate of return of 12% and the real rate of return is 8%. What is the inflation rate?- a)4%
- b)12%
- c)20%
- d)8%
Correct answer is option 'A'. Can you explain this answer?
An investment earns a nominal rate of return of 12% and the real rate of return is 8%. What is the inflation rate?
a)
4%
b)
12%
c)
20%
d)
8%
|
|
Learning Educators answered |
Inflation rate = Nominal rate of return - Real rate of return = 12% - 8% = 4%
Which of the following accurately describes the relationship between nominal rate of return and real rate of return?- a)Nominal rate of return equals real rate of return plus inflation rate
- b)Nominal rate of return equals real rate of return minus inflation rate
- c)Nominal rate of return equals real rate of return multiplied by inflation rate
- d)Nominal rate of return equals real rate of return divided by inflation rate
Correct answer is option 'A'. Can you explain this answer?
Which of the following accurately describes the relationship between nominal rate of return and real rate of return?
a)
Nominal rate of return equals real rate of return plus inflation rate
b)
Nominal rate of return equals real rate of return minus inflation rate
c)
Nominal rate of return equals real rate of return multiplied by inflation rate
d)
Nominal rate of return equals real rate of return divided by inflation rate
|
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Nipun Tuteja answered |
The nominal rate of return is composed of the real rate of return plus the inflation rate. Mathematically, it can be expressed as: Nominal rate of return = Real rate of return + Inflation rate. This relationship reflects how inflation affects the nominal rate of return.
Which of the following is true about the nominal rate of return?- a)It considers only the effect of inflation
- b)It is always higher than the real rate of return
- c)It is unaffected by changes in purchasing power
- d)It is the same as the effective rate of return
Correct answer is option 'B'. Can you explain this answer?
Which of the following is true about the nominal rate of return?
a)
It considers only the effect of inflation
b)
It is always higher than the real rate of return
c)
It is unaffected by changes in purchasing power
d)
It is the same as the effective rate of return
|
|
Nipun Tuteja answered |
The nominal rate of return includes the effects of inflation, whereas the real rate of return adjusts for inflation. Since the nominal rate of return includes inflation, it is typically higher than the real rate of return, except in cases where inflation is negative.
An investment earns a nominal rate of return of 8%, and the expected inflation rate is 3%. What is the real rate of return?- a)11%
- b)5%
- c)8%
- d)3%
Correct answer is option 'A'. Can you explain this answer?
An investment earns a nominal rate of return of 8%, and the expected inflation rate is 3%. What is the real rate of return?
a)
11%
b)
5%
c)
8%
d)
3%
|
|
Curiosity Classes answered |
Real rate of return = Nominal rate of return - Inflation rate = 8% - 3% = 5%
An investor receives a nominal rate of return of 6% on their portfolio, and the inflation rate is 2%. What is the real rate of return?- a)3%
- b)8%
- c)6%
- d)4%
Correct answer is option 'A'. Can you explain this answer?
An investor receives a nominal rate of return of 6% on their portfolio, and the inflation rate is 2%. What is the real rate of return?
a)
3%
b)
8%
c)
6%
d)
4%
|
|
KP Classes answered |
Real rate of return = Nominal rate of return - Inflation rate = 6% - 2% = 3%
A stock provides a nominal rate of return of 7%. If the real rate of return is 3%, what is the inflation rate?- a)4%
- b)7%
- c)10%
- d)3%
Correct answer is option 'A'. Can you explain this answer?
A stock provides a nominal rate of return of 7%. If the real rate of return is 3%, what is the inflation rate?
a)
4%
b)
7%
c)
10%
d)
3%
|
|
KP Classes answered |
Inflation rate = Nominal rate of return - Real rate of return = 7% - 3% = 4%
Chapter doubts & questions for Nominal rate of Return - Applied Mathematics for Class 11 2025 is part of Commerce exam preparation. The chapters have been prepared according to the Commerce exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for Commerce 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.
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Applied Mathematics for Class 11
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