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What is the appropriate annual risk-free rate on a three-year default-free loan under the following conditions? Real interest rate=3%, first year expected inflation is 1.7%,
What is the appropriate annual risk-free rate on a three-year default-free loan under the following conditions? Real interest rate=3%, first year expected inflation is 1.7%, second year expected inflation is 2.2%, third year expected inflation is 1.9%.
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