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QUESTION 1 The Bank of the South is offering in a new promotion to pay a rate of 2.1% on bonds acquired in the following

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QUESTION 1 The Bank of the South is offering in a new promotion to pay a rate of 2.1% on bonds acquired in the following 3 months. The bonds are for one year and they are redeemed capital and interest after one year. It is expected that inflation for the following year will be 2.8%. What is the real rate that the bank is paying when inflation is taken into consideration (net rate)? Give your answer in percentage points

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