If market interest rates are currently 15% and your investment provides you this

Question

If market interest rates are currently 15% and your investment provides you this 15% return, does that imply that you ae 15% more wealthy (after vs. before this investment return)? Assume wealth is defined as the ability to consume (purchase) goods or services.

A. Yes, becasue with inflation you do indeed have 15% more money

B. Yes, because with inflation 15% more money does imply 15% more wealth

C. No, because with inflation 15% more money does not imply 15% more wealth

D. No, because with inflation 15% more money means your wealth incrased more than 15%

E. None of the above or insufficient information.

Explanation / Answer

The correct answer is (C) - No, because with inflation 15% more money does not imply 15% more wealth

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