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In 2007 and 2008, the nation of Zimbabwe faced severe hyperinflation. By late 2008, the estimated inflation was more than one trillion percent (thats 1,000,000,000,000)
In 2007 and 2008, the nation of Zimbabwe faced severe hyperinflation. By late 2008, the estimated inflation was more than one trillion percent (thats 1,000,000,000,000) per year. Assuming an inflation rate of one trillion percent, what is the real rate of return on an investment with a two trillion percent nominal return?
*Use equation: i=(1+E(INF))*(1+iR)-1; where i=nominal rate of interest, E(INF)=expected inflation rate, and iR=real rate of interest
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