In Table, why are the average real returns lower than the average nominal returns for each asset

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In Table, why are the average real returns lower than the average nominal returns for each asset class? Is it always true that an assets nominal return is higher than its real return?

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Introduction to Corporate Finance

ISBN: 978-0324657937

2nd edition

Authors: Scott B. Smart, William L Megginson

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Question Posted: May 13, 2015 05:52 AM

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In Table, why are the average real returns lower than the average nominal returns for each asset

Question:

Nominal (%) Real (%) Asset Class Average Best Year WorstYe Average Best Year Worst Year Bills Bonds Stocks 4.0 5.2 11.7 14.7 40.4 57.6 0.0 9.2 43.9 2.3 8.5 19.7 35.1 56.5 -15.1 19.4 38.0

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Table shows that sometimes though not often an assets nominal return may be higher than its real ret...View the full answer

Introduction to Corporate Finance

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