Question 6
In the country of Westeros, the nominal interest rate is 10% and the expected inflation rate is 4%. What is the real interest rate in Westeros?
6.23%
5.77%
14.00%
9.60%
Question 6: In the country of Westeros, the nominal interest rate is …
Show answer
Correct answer
5.77%
Question 6 of 25 in the IIT Madras BS Corporate Finance (Corporate Finance) Quiz 1 paper sat on 15 Mar 2026, in the January 2026 term (Corporate Finance 15 Mar 26). It carries 4 marks.
More questions from this paper
- Ria invested Rs 10,000 in a fund that tripled her investment 12 years later. What was the approximate annual rate of in…
- The GDP deflator in the economy of Arrakis is 120 in the year 2025. If the Nominal GDP is reported as 24,000 units, wha…
- Consider a project with an initial investment of Rs 5,000 in Year 0. It generates cash flows of Rs 3,000 in Year 1 and …
- A company’s stock is currently trading at Rs 500. It is expected to pay a dividend of Rs 25 next year. If the required …
- An asset earns an annual interest rate of 6% compounded continuously. If you invest Rs 2,000 today, what will be the va…
- Which of the following statements regarding the Yield Curve is FALSE?
- You take a loan of Rs 2,00,000 at a monthly interest rate of 1% to be repaid over 2 years (24 months). What is the Equa…
- Project A pays Rs 500 forever starting next year. Project B pays Rs 1,000 forever, starting 10 years from today. If the…
- Calculate the duration of a bond that pays Rs 500 in 2 years and Rs 1,500 in 4 years.
- A consumer basket consists of 2 Apples and 4 Bananas. 2023 (base): Price of Apple = 10, Price of Banana = 5. 2024: Pric…
- An investment offers Rs 7,000 in Year 1 and Rs 6,000 in Year 2. If the current cost of this investment is Rs 10,000, wh…
- How long will it take to double your money if the interest rate is 8% per annum (compounded annually)?
- You save Rs 50 every day and deposit it into a bank account at the end of the day. The bank pays 7.3% annual interest c…
- Sahil earns Rs 50,000 in period 1 and Rs 60,000 in period 2. The interest rate is 20%. What is the Maximum Consumption …
- A project has the following cash flows: Year 0: -10000, Year 1: 500, Year 2: 1000, Year 3: 1500, Year 4: 2000, Year 5: …
- In 2024, the Nominal GDP of a country increased by 10%, while the Real GDP remained constant. This implies:
- Consider a 10-year zero-coupon bond that promises to pay 1000 units after 10 years. The annualized interest rate is 5%.…
- Your portfolio consists of two "Red" bonds, each with a face value of 100 and a probability of default p =10%. The bond…
- You go to an art exhibition in 2026 and see a painting is priced at Rs 2,00,000. You search online and find out that th…
- Which of the following yields the highest return on Rs 100 invested for 1 year?
- A project earns a total return of 34% over two years. If the return in the first year was 16%, what was the annual retu…
- Systematic Investment Plan (SIP) is a popular method of investing by contributing a fixed amount of money at regular in…
- You are looking to invest in one new project, and you have three options: Project-A is expected to generate Rs 10 lakh …
- Consider a bond that pays Rs 200 in 3 years, Rs 400 in 6 years, Rs 600 in 9 years, Rs 800 in 12 years and Rs 1000 in 15…