An analyst is evaluating securities in a developing nation where the inflation rate is very highAs a result, the analyst has been warned not to ignore the cross-product between the real rate and Inflation . If the real -free rate is 4% and Inflation is expected to be 11% each of the next 4 years, what is the yield on a 4-year security with no maturity, default, or liquidity risk? (Hint: Refer to "The Links Between Expected Inflation and interest Rates: A Closer Look" Round your answer to two decimal places.

5. Problem 6.06 (Inflation Cross-Product) eBook Problem Walk-Through An analyst is evaluating securities in a developing nation where the inflation rate is very high. As a result, the analyst has been warned not to ignore the cross-product between the real rate and inflation. If the real risk-free rate is 4% and inflation is expected to be 11% each of the next 4 years, what is the yield on a 4-year security with no maturity, default, or liquidity risk? (Hint: Refer to "The Links Between Expected Inflation and Interest Rates: A Closer Look ) Round your answer to two decimal places