Question: The market interest rate if is 12% per year compounded semiannually. For an inflation rate of 2% per 6 months, the effective semiannual interest rate

The market interest rate if is 12% per year compounded semiannually. For an inflation rate of 2% per 6 months, the effective semiannual interest rate is closest to:
(a) 2%
(b) 3%
(c) 4%
(d) 6%

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