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With interest rates on the rise, many Americans are wondering what their investment strategy should be. A safe (i.e., a virtually risk-free) and increasingly popular
With interest rates on the rise, many Americans are wondering what their investment strategy should be. A safe (i.e., a virtually risk-free) and increasingly popular way to keep pace with the cost of living is to purchase government bonds. These so called I-bonds pay competitive interest rates and increase in value when the CPI rises. These bonds can be held for up to 30 years. Suppose you purchased an i bond for $11,000 and held it for 11 years, at which time you received $21,000 for the bond Inflation has averaged 4% per year during this 11-year period what real annual rate of return did you earn on your inflation-adjusted i-bond? Is it really competitive? Historically, real returns have been about 2-3% per year The real annual rate of return is (Round to one decimal place.) Is it really competitive? Choose the correct answer below. O Yes O No
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