California Real Estate Practice Exam

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The best hedge against inflation would be:

equity assets
government bonds
mortgages/loans
savings accounts

The correct answer is: equity assets

Equity assets would be the best hedge against inflation because they have the potential to increase in value over time, providing a return that can potentially keep up with or exceed the rate of inflation. Government bonds and savings accounts may offer fixed interest rates, but the returns may not be high enough to keep up with inflation. Mortgages or loans could potentially benefit from inflation, but they also come with the risk of default and decreased value in the event of an economic downturn. Therefore, equity assets would be the most effective option for protecting against inflation.