On a financial television show, Paz hears the announcer say that the country is currently experiencing a high inflation rate. How will this MOST likely affect Paz’s investments? A.
With the current high inflation rate, the value of Paz’s investments will possibly not increase at the same rate as the general level of inflation.

B.
This level of high inflation guarantees higher returns on Paz’s investments, making it a very safe investment.

C.
If the return on Paz’s investment is growing at a slower rate than the inflation rate, her investment will increase her purchasing power.

D.
If Paz’s investment is earning 2 percent interest, but the inflation rate on goods is increasing by 5 percent, she has gained about 3 percent of purchasing power.