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Item 4

Item 4 1 points

Treasury bills are currently paying 8 percent and the inflation rate is 3 percent.

a.	What is the approximate real rate of interest? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b.	What is the exact real rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)