- CFA Exams
- CFA Level I Exam
- Study Session 4. Economics
- Reading 10. Currency Exchange Rates: Understanding Equilibrium Value
- Subject 3. A Long-Term Framework for Exchange Rates
CFA Practice Question
If the real rate of interest is 5% and the inflation rate is 5%, what is the nominal rate of interest based on the Fisher effect?
Correct Answer: 10%
5% + 5% = 10%.
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