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You purchase a security that promises a 10 percent rate of return. You believe that the real rate of return will be 7 percent. The

You purchase a security that promises a 10 percent rate of return. You believe that the real rate of return will be 7 percent. The pure rate in the market is 1.5 percent. Use exact formulation.

What is your forecast for the inflation rate?

4.74%

4.56%

3.00%

2.80%

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