1. Explain the impact of inflation on rates of return. (2 pts)

2. You are considering investing money in Treasury Bills and wondering what the real risk free rate of interest is. Currently, Treasury bills are yielding 4.5% and the future inflation rate is expected to be 2.1% per year. What is the real rate of interest? (2 pts)

3. What is the difference between money market securities and capital market securities? (2 pts)