You are considering investing money in Treasury bills and wondering what the real risk-free rate of interest
Question:
You are considering investing money in Treasury bills and wondering what the real risk-free rate of interest is. Currently, Treasury bills are yielding 4 percent and the future inflation rate is expected to be 2 percent per year. Ignoring the cross product between the real rate of interest and the inflation rate, what is the real risk-free rate of interest?
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The real riskfree rate of interest can be calculated by subtracting the expected ...View the full answer
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Related Book For 
Foundations Of Finance
ISBN: 9781292318738
10th Global Edition
Authors: Arthur Keown, John Martin, J. Petty
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