📚 CBSE Grade-10 Study Guide
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Introduction to Financial Markets (405) — CBSE Class 10 board question

Q1. [1] § Why should one invest? § What is meant by Interest? § What factors determine interest rates?
What is meant by 'Real rate of return'?
Previously asked in CBSE board exam
2023 92 Q2 (i)
Generated by claude-sonnet-4-6 · 2026-06-15 07:07 · grounding rag
Model Answer

Real rate of return is the return on an investment after adjusting for inflation; it ensures the investment's value actually increases over time.

Source: Chapter 1, Why should one invest?

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Explanation

The passage explicitly states: "look at an investment's 'real' rate of return, which is the return after inflation." Examiners expect you to include both key ideas — (1) return after inflation, and (2) its purpose of maintaining/increasing the investment's real value. One crisp sentence is enough for 1 mark.

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Previous-year CBSE Grade 10 board exam questions, organised by subject and chapter, each with a model answer — free to read and print.