Nominal and real returns

nominal and real returns

Level - BASIC

Learn about real and nominal returns and understand how inflation impacts real returns from investments.

AUTHOR(S): Shreeja Thirani

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    1.Suppose inflation is 8%. What is the minimum nominal return that an investor should seek?



  • Higher than 8%
  • Between 5% and 8%
  • Between 1% and 5%
  • 2.During periods of rising inflation, which investment will provide the best real return?



  • Corporate Debentures
  • Equity shares
  • Bank deposit
  • 3.Due to inflation, the real return earned on a fixed deposit is ______ than the nominal return



  • lower
  • independent of
  • higher
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