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Problem #1 (4 points) The real rate of interest is currently 3 percent. The inflationary expectation is 8 percent. The risk premium is 2 percent.

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Problem #1 (4 points) The real rate of interest is currently 3 percent. The inflationary expectation is 8 percent. The risk premium is 2 percent. a. What is the risk-free rate of interest? b. What is the nominal rate of interest

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