given that the inflation rate in 2006 was about 3.24%, while a short term munici

Question

given that the inflation rate in 2006 was about 3.24%, while a short term municipal bond offered a rate of 2.9%, which of the following statement is correct?
a) the real interest rate for investors in these bonds was greater than the rate of inflation
b) the purchasing power of investors in these bonds grew over the course of the year
c) investors in these bonds were able to buy less at the end of the year than they could've pruchased at the start of the year
d) the nominal interest rate offered by these bonds gave the true increase in purchasing power that resulted from investing in these bonds

Explanation / Answer

its definitely option c IE c) investors in these bonds were able to buy less at the end of the year than they could've pruchased at the start of the year.

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