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You are considering investing money in Treasury bills and wondering what the real risk- free rate of

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You are considering investing money in Treasury bills and wondering what the real risk- free rate of interest is. Currently, Treasury bills are yielding 4.5% and the future inflation rate is expected to be 2.1% per year. Ignoring the cross product between the real rate of interest and the inflation rate, what is the real risk- free rate of interest?
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Ignoring the crossproduct involves using the simple arithmetic calculation ra...View the full answer


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Foundations of Finance The Logic and Practice of Financial Management

Foundations of Finance The Logic and Practice of Financial Management

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Authors: Arthur J. Keown, John D. Martin, J. William Petty

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