SIE Exam Question 561: Answer and Explanation

Question: 561

Which of the following is the formula to calculate an investment's real return?

• A. Real return = Nominal return - Inflation
• B. Real return = Nominal return + Inflation
• C. Real return = Nominal return ÷ Inflation
• D. Real return = Inflation ÷ Nominal return

Correct Answer: A

Explanation:

Real return = Nominal return - Inflation