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Assume the inflation rate is 2.04% APR, compounded annually. Would you rather earn a nominal return of 5.65% APR compounded semiannually, or a real return
Assume the inflation rate is 2.04% APR, compounded annually. Would you rather earn a nominal return of 5.65% APR compounded semiannually, or a real return of 2.33% APR, compounded quarterly? (Note: Be careful not to round any intermediate steps less than six decimal places ) To put these on the same basis, you must convert them both to nominal EARs The EAR for 5.65% APR, compounded semiannually is 0.057298 . (Type your answer in decimal format Round to six decimal places.) The nominal EAR for a real 2.33% APR, compounded quarterly is | | (Type your answer in decimal format Round to six decimal places.)
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