Question
Suppose 1-year T-Bills currently yield 7.00% and the future inflation rate is expected to be constant at 6.00% per year. What is the real risk-free
Suppose 1-year T-Bills currently yield 7.00% and the future inflation rate is expected to be constant at 6.00% per year.
What is the real risk-free rate of return, r*?
Disregard any cross-production terms, i.e., if averaging is required, use the arithmetic average.
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Personal Financial Planning
Authors: Lewis J. Altfest
2nd edition
1259277186, 978-1259277184
