why should investors know the difference between nominal and real interest rates?\no to know what they are…

why should investors know the difference between nominal and real interest rates?\no to know what they are likely to lose\no to understand changes in monetary policy\no to guarantee an investment’s profitability\no to recognize the effects of inflation

why should investors know the difference between nominal and real interest rates?\no to know what they are likely to lose\no to understand changes in monetary policy\no to guarantee an investment’s profitability\no to recognize the effects of inflation

Answer

Brief Explanations:

The real - interest rate is adjusted for inflation while the nominal interest rate is not. Inflation can erode the purchasing - power of returns. Investors need to recognize the effects of inflation on their investments, which is why knowing the difference between nominal and real interest rates is crucial.

Answer:

to recognize the effects of inflation