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Suppose 1-year T-bills currently yield 7.40% and the future inflation rate is expected to be constant at 5-10% per year. What is the real risk-free
Suppose 1-year T-bills currently yield 7.40% and the future inflation rate is expected to be constant at 5-10\% 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. a. 6.25% b. 12.50% c. 7.784 d. 2.30% e. 7.40%
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