You observe that the inflation rate in the United States is 3.6 percent per year and that T-bills currently yield 3.9 percent annually.

1. What do you estimate the inflation rate to be in Australia, if short-term Australian government securities yield 5 percent per year?

Australian inflation rate?

1. 4.70%
2. 2.51%
3. (2.50)%
4. 4.89%
5. 4.51%

2. What do you estimate the inflation rate to be in Canada, if short-term Canadian government securities yield 6.5 percent per year?

Canadian inflation rate?

1. 6.20%
2. 1.00%
3. (1.00)%
4. 6.45%
5. 5.95%

3. What do you estimate the inflation rate to be in Taiwan, if short-term Taiwanese government securities yield 10.5 percent per year?

Taiwanese inflation rate?

1. 10.20%
2. (3.00)%
3. 3.00%
4. 10.61%
5. 9.79%