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b. If the 1-year Treasury bill rate on January 17, 2018 is 1.77% and the inflation expectation for the coming year is 1.90%, what is
b. If the 1-year Treasury bill rate on January 17, 2018 is 1.77% and the inflation
expectation for the coming year is 1.90%, what is the expected real rate of return
for an investor who purchases the 1-year Treasury bill?
Expected Real Rate of Return _______________
c.If an investor desires a real rate of return of 2% and expects inflation to be 2%
next year, what nominal rate should the investor demand?
Nominal Rate Investor Demands _______________
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