The XYZ Corporation can make a real (inflation-adjusted) return on an investment of 9 percent. The nominal rate of interest is 13 percent and the rate of inflation is 7 percent. We can conclude that the:
A. investment will be profitable.
B. investment will be unprofitable.
C. real rate of interest is 4 percent.
D. real rate of interest is 2 percent.
Answer: A
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