Question
Inflation is expected to be 3 percent over the next year. You desire an annual real rate of return of 2.5 percent on your investments.
Inflation is expected to be 3 percent over the next year. You desire an annual real rate of return of 2.5 percent on your investments.
What nominal rate of interest would have to be offered on a one-year Treasury security for you to consider making an investment?
b. A one-year corporate debt security is being offered at 2 percentage points over the one-year Treasury security rate that meets your requirement in (a). What would be the nominal interest rate on the corporate security?
PLEASE ANSWER IN EXCEL FORMAT
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Investing From Scratch A Handbook For The Young Investor
Authors: James Lowell
1st Edition
014303684X, 978-0143036845
