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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?
Verified Answer
An investor receives a nominal rate of return of 6% on their portfolio...
Real rate of return = Nominal rate of return - Inflation rate = 6% - 2% = 3%
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