A single payment bond with a term of five years has a primary market price of $25,000 and a maturity payment of $35,000. At the time it is issued, the buyer expects the annual inflation rate over the term of the bond to be five percent. [68] The nominal interest rate on this bond is _ percent. 8.0 O 7.0 6.0 5.0 [69] The exact value of the ex ante real interest rate on this bond is 1.9 percent is 2.0 percent. is 2.1 percent can't be calculated from the information given: we would need the actual inflation rate over the term of the bond. A market basket cost $175 in the base year, which is two years before the year this bond was issued. The same basket costs $280 at the maturity date of this bond. [70] The value of the maturity payment on the bond, in base year dollars, is 125 200 12,500 21,875 [71] The average annual inflation rate, from the base year to the year of maturity, was _ percent. 5.0 6.9 7.5 9.9 O