finc 331 hw 6 question four

Interest rate fundamentais: The real rate of return Cart Foster, a trainee at an imvestment banking frm, is trying to got an idea of what reai rase of refum investon are eapecting in iocay/t marketplace. He has looked up the rate paid on 3-month U.S. Treasury bils and found it to be 4.6%. He has decided to use the recent rate of change in the Conaumer Price thdes as a prasy for the inflabonary expectatons of investors. That annualized rate now stands at 0.8%. On the basis of the information that Cart has collected, what estimale can he make of the ras rate of refinarif The estmate of the real rale of retum is \%. (Round to one decimal place.) Tice esiruste of the reai rais of retirn in - Pround to one docimal glacei) The ectimak of the rese rawe of fetarm is 7. (Round to one decimel place)