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1. Suppose 1-year T-bills currently yield 6.60% and the future inflation rate is expected to be constant at 5.00% per year. What is the real

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1. Suppose 1-year T-bills currently yield 6.60% and the future inflation rate is expected to be constant at 5.00% per year. What is the real risk-free rate of return, r ? Disregard any cross-product terms, i.c., if averaging is required, use the arithmetic average? a. 1.00% b. 1.60% c. 11.60% d. 5.60% c. 1.32%

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