Asked by Elizabeth Carney on Jul 14, 2024

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Suppose you open The National Post and see that 30-year Canada Bonds are yielding 8.5%. This is an example of ___________.

A) a real return
B) a nominal return
C) an inflation premium
D) a default risk premium
E) a taxability premium

Nominal Return

The rate of return on an investment without adjusting for inflation.

Yielding

The income produced by an investment, typically expressed as a percentage of the investment's cost.

Canada Bonds

Bonds issued by the Canadian government, offering a low-risk investment option with fixed interest payments.

  • Comprehend the diverse risk premiums linked to investing in bonds.
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Verified Answer

BS
Bhuvi SingalJul 15, 2024
Final Answer :
B
Explanation :
The yield on a 30-year Canada Bond represents a nominal return, as it does not account for inflation or other factors that might affect the real return on the investment.