If the expected inflation is 100% and the real required rate of return is 6%, the nominal interest rate according to the exact form of the Fisher effect is closest to: A) 112.0%. B) 6.0%. C) 12.0%. D) 95.0%.
(1+.06)(1+1) -1 = 1.12 x 100 = 112%
open and shut case. good job mcleod. i obviously got it wrong.
Thanks. I almost said C but I caught my mistake
i choose c, ofcourse.