Nominal Interest Rate and Real Interest Rate Vs. Inflation. Calculation Fisher Effect. CFA Exam

In this recording, I discuss nominal interest rate and real interest rate. The nominal interest rate is the interest rate before taking inflation into account, in contrast to real interest rates and effective interest rates. The real interest rate reflects the rate of time-preference for current goods over future goods. ✔️Accounting students and CPA Exam candidates, check my website for additional resources: https://farhatlectures.com/ 📧Connect with me on social media: https://linktr.ee/farhatlectures #nominalrate #cfaexam #realrate Prerequisite:    • Chapter 5: Risk, Return, and the Historica...   When prices of goods and services change, we need to distinguish between nominal and real rates of return. When you invest money in a bank account, for example, you are typically quoted a nominal interest rate. This is the rate at which the dollar value of your account grows. In contrast, the real interest rate is the rate at which the goods you can buy with your funds grows. nominal interest rate The interest rate in terms of nominal (not adjusted for purchasing power) dollars. real interest rate The growth rate of purchasing power derived from an investment.