n NISM Certifications
NSM General NISM
Medium

One way to calculate the Real Rate is by ________.

Practice question from NISM Series IV - Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Nominal rate plus effective rate

  2. Nominal interest rate less inflation

    Correct answer

  3. C

    Nominal rate plus inflation

  4. D

    Inflation less nominal rate

Why this is the answer

Real interest rate ≈ Nominal interest rate - Inflation rate.

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