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Please work out the Problem Suppose 1-year T-bills currently yield 6.50%, and the future inflation rate is expected to be constant at 2.00% per year.

Please work out the Problem

Suppose 1-year T-bills currently yield 6.50%, and the future inflation rate is expected to be constant at 2.00% per year. What is the real risk-free rate of return, r*? The cross-product term should be considered, i.e., if averaging is required, use the geometric average. (Round your final answer to 2 decimal places.)

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