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During a period of severe inflation, a zero-coupon bond offered a nominal HPR of 90% per year. The inflation rate (i) was 60% per year.
During a period of severe inflation, a zero-coupon bond offered a nominal HPR of 90% per year. The inflation rate (i) was 60% per year. a. What was the real HPR on the bond over the year? b. Compare this real HPR to the approximation real nominal -i
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