ECN 221 Business Statistics Review Session Final Exam (50 Multiple Choice Questions and answers) new update version fall year Arizona State University

ECN 221 Business Statistics Review Session Final Exam (50 Multiple Choice Questions and answers) new update versi
year 2025-2026 Arizona State University




Review Session
Final Exam

,Exam Details
• 1 hour 50 mins
• 50 Multiple Choice Questions
• Calculators Allowed (cannot use your computers/tablets/cellphone
• Please get HB (No. 2) Pencils along
• And get your ASU ID (physical or electronic) along

,Question 1
You put money into an account and earn a:
• real interest rate of 3%,
• inflation is 5%, and
• tax on interest income (your marginal tax rate) is 25%.
What is your after-tax real rate of interest?

On iClicker, enter only numeric values (For 10%, enter 10; for 5%, ent
5, etc.)

, Answer 1
• real interest rate of 3%,
• inflation is 5%, and
• tax on interest income (your marginal tax rate) is 25%.
After-tax real rate of interest?

Nominal interest rate = 3+5 = 8%
For every $100 as principal, interest income = $8
Out of $8, 0.25*8 = $2 is tax, and $8-$2 = $6 is the after-tax nominal retur
The after-tax nominal interest rate = 6%
Since inflation = 5% ⇒ After-tax real rate of interest = 6-5 = 1%