Consider the following information for a period of years: Arithmetic Mean Long-term government bonds 6.9 % Long-term corporate bonds 7.0 Inflation 3.8 a. What is the real return on long-term government bonds?

the real return is 2.99%

Explanation:

The computation of the real return on long term government bond is shown below:

As we know that

Real rate of return is = [(1 + nominal rate) ÷ (1+inflation rate)] - 1

= [(1 + 0.069) ÷ (1 + 0.038)] - 1

= 2.99%

hence, the real return is 2.99%

We simply applied the above formula so that the correct value could come

And, the same is to be considered

ans.

heterothermic organisms include those organisms that can switch between homeothermic (having body temperature higher than environment) and poikilothermic (having variation in internal body temperature) strategies.

some migratory birds show heterothermy as they decrease their metabolic rate during cold nights to keep their body temperature low. drop in metabolic rate allows increase in production efficiency of birds that reduces the internal body temperature to make it equal to external cold temperature during cold nights.

thus, the correct answer is 'birds allow their temperature drop in order to increase their production efficiency.'