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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- product terms, i.e., if averaging is required, use the arithmetic average. O a. 0.85% b. 0.82% c. 0.97% O d. 1.00% e. 1.15%
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