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13. If you expect the inflation rate to be 4 percent next year and a one-year bond has a yield to maturity of 3 percent,

13. If you expect the inflation rate to be 4 percent next year and a one-year bond has a yield to maturity of 3 percent, then the real interest rate on this bond is

A) -1 percent.

B) 1 percent.

C) -7 percent.

D) 7 percent.

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