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You are trying to estimate the real interest rate for the mining industry products and proceed as follows. You consider buying coal and gold in

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You are trying to estimate the real interest rate for the mining industry products and proceed as follows. You consider buying coal and gold in equal proportion. spending $1000 on coal. and another $1000 on gold in today's dollars. In 7 years from now. the selling values in actual dollars are predicted to be $1,278 (coallI and $1,206 {gold}. Inflation (for coal] is 1.8% per year, for the next 7 years. For gold, the gold price index is predicted to rise in the next 7 years from the current 411 points to 434 points. Compute the estimated real interest rate. as a number. with 0.001 precision. Hint: Calculate real interest rate for the cash flow: 1} inyest now $1000+$1000; 2) sell in 7' years coal and gold and obtain appropriate cash ow

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