Question

An investment offers a total return of 10 percent over the coming year. Janice Yellen thinks the total real return on this investment will be only 6 percent. What does Janice believe the inflation rate will be over the next year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Answer 1

4.00%

Step-by-step explanation:

Total return or nominal return is real return + expected inflation

Total return = Real return - inflation rate

Inflation rate = 10% - 6% = 4%

I hope my answer helps you