Question
At EOY 20X1, BetaBank offers a one year CD with an APR of 4%, compounded quarterly. Inflation (r inf ) is running at 4.0% annually
At EOY 20X1, BetaBank offers a one year CD with an APR of 4%, compounded quarterly. Inflation (rinf) is running at 4.0% annually at this time. What is the real rate of return on this CD? Do not round intermediate calculations. Round your answer to four decimal places and do not represent your answer as a percent. IE: write 0.2672 not 26.72%.
Hint: you must convert the APR to an EAIR.
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Financial Markets And Institutions
Authors: Frederic S. Mishkin, Stanley Eakins
6th Edition
0321374215, 9780321374219
