6. Real vs Nominal (25 points) Consider the cash flow stream below, which is in nominal dollars. The average inflation rate is 3% per year compounded yearly and the real interest rate is 6% per year compounded yearly. Year Nominal Cash Flow 0 +$7500 1 +$8000 2 -$5000 3 +$2000 4 -$1000 (a) Find the present value of this cash flow stream by using the inflation rate and the real interest rate separately. (10 points) (b) Find the present value of this cash flow stream by using the market interest rate. (10 points) (c) Explain any difference in the answers between (a) and (b), if any. (5 points)