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Mr. A wants to borrow funds from B. The risk-free rate is 6% and current inflation is 2%. It is expected that inflation is expected
Mr. A wants to borrow funds from B. The risk-free rate is 6% and current inflation is 2%. It is expected that inflation is expected to grow at 3%. B finds a relevant margin of 4% on the loan.
Compute:
- Risk-free rate
- New nominal risk-free rate
- The interest rate for the loan
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Business And Personal Finance
Authors: McGraw-Hill
1st Edition
0078945801, 9780078945809
