Question 64 of 90
What is the real rate of return?
A
The return earned after payment of all expenses
B
The return earned after taxes
C
The return earned after adjusting for risk
D
The return earned after adjusting for inflation
Correct Option:
D
Explanation
The real rate of return measures the return on an investment after accounting for inflation. It reflects the actual increase in purchasing power. It is commonly approximated as the nominal return minus the inflation rate.
