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Problem 1 During a period of severe inflation, a zero-coupon bond offered a nominal HPR of 30% per year. The inflation rate (i) was 15%
Problem 1 During a period of severe inflation, a zero-coupon bond offered a nominal HPR of 30% per year. The inflation rate (i) was 15% per year. a. [1pt] What was the real HPR on the bond over the year? b. [1pt] Compare this real HPR to the approximation rreal I nominal
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