Neco Model Questions Vol1 2025 Economics Question 32

Practice objective / multiple choice question 32 from the 2025 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2025 Economics Objective / Multiple Choice Medium Difficulty
Question 32 NECO_MODEL_QUESTIONS_VOL1 • 2025 • ECONOMICS • objective

Two government bonds are available. Bond A offers a nominal interest rate of 12\% per annum, while Bond B offers 9\% per annum. Expected inflation for the next year is 5\% for the first six months and 8\% for the last six months. Using the Fisher relationship, determine which bond provides the higher real rate of return.

Answer Options

A. Bond B
B. Both bonds have the same real return
Correct Answer C. Bond A
D. Neither bond provides a positive real return
Correct Answer
C
Correct Option:
Bond A

About This Question

This is Neco Model Questions Vol1 2025 Economics Question 32. It is one of the objective questions from the 2025 Neco Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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