Question
Suppose one year T-bills current yield 5.95% in the future inflation rate is expected to be constant at 5.25% per year. What is the approximate
Suppose one year T-bills current yield 5.95% in the future inflation rate is expected to be constant at 5.25% per year. What is the approximate real rate of return?
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Step: 1
To calculate the approximate real rate of return we can use the Fisher equation which ...Get Instant Access to Expert-Tailored Solutions
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Macroeconomics
Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore, Ronald D. Kneebone
6th Canadian Edition
321675606, 978-0321675606
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