Sometimes real rates of return are calculated by subtracting the rate of inflation from the nominal rate.
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Sometimes real rates of return are calculated by subtracting the rate of inflation from the nominal rate. This rule of thumb is a good approximation if the inflation rate is low. How big is the error from using this rule of thumb to calculate real rates of return in the followingcases?
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1 r nominal 1 r real 1 inflat...View the full answer
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Related Book For 
Principles of Corporate Finance
ISBN: 978-0072869460
7th edition
Authors: Richard A. Brealey, Stewart C. Myers
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