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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?
Verified Answer
A stock provides a nominal rate of return of 7%. If the real rate of r...
Inflation rate = Nominal rate of return - Real rate of return = 7% - 3% = 4%
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